A firm has a current capital structure consisting of $200,000 in perpetual debt, borrowed at 9% annual
Fantastic news! We've Found the answer you've been seeking!
Question:
A firm has a current capital structure consisting of $200,000 in perpetual debt, borrowed at 9% annual interest rate, and 10,000 shares of common stock. The firm's tax rate is 40 percent on ordinary income. If the annual EBIT is expected to be $100,000, calculate the firm's annual earnings per share (EPS):
[Express your answer in dollars and cents, rounded to the nearest penny (eg. 2.34)]
EPS = $
What is the firm's degree of financial leverage (DFL)?
[Round your answer to 2 (two) decimal places (eg. 3.45)]
DFL =
Posted Date: