Question: 7. Trieste Corp. Forecast $1.00 EPS for year 1. Forecast $100 million of EBIT. At the end of year 0, it borrows $200 million in

7. Trieste Corp. Forecast $1.00 EPS for year 1. Forecast $100 million of EBIT.

At the end of year 0, it borrows $200 million in new debt at 7% interest. It presently has no debt. It intends to repurchase 10 million shares at $20 per share.

The tax rate is 30%

70 million shares outstanding.

The stock trades at $20 per share after the announcement of the repurchase.

Assume no change in the companys P/E ratio.

What is your forecast of Trieste EPS after the repurchase?

Use a table for your answer.

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