A firm is currently an all equity firm with a total market value of $11,500,000 with 1,200,000
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A firm is currently an all equity firm with a total market value of $11,500,000 with 1,200,000 shares of stock outstanding. The firm has expected EBIT of $1,440,000 if the economy is normal and $1,870,000 if the economy booms. The firm is considering a $4,500,000 bond issue with an attached interest rate of 6 percent. The bond proceeds will be used to repurchase shares. Ignore taxes. What will the earnings per share be after the repurchase if the economy is normal?
Related Book For
Corporate Finance Core Principles And Applications
ISBN: 9781260571127
6th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
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