Ben Ten Limited (BTL) is a new company and management are trying to deciue on a...

 

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Ben Ten Limited (BTL) is a new company and management are trying to deciue on a financing structure. They want to raise $10.000.000. They were offered the following option Fund 40% of the firm with debt and the balance with ordinary shares at an issue price of $3 per share. BTL has been advised that the cost of debt finance would be 2.92%pa due to its relative risk The current Earnings Before Interest and Tax (EBIT) is $7.000.000 The company tax rate is 30% Previous Calculate the Earnings Per Share of this option (Round your answer to 2 decimal places. For example, if your answer is 0.66666666-> Enter your answer as 0.67) Ben Ten Limited (BTL) is a new company and management are trying to deciue on a financing structure. They want to raise $10.000.000. They were offered the following option Fund 40% of the firm with debt and the balance with ordinary shares at an issue price of $3 per share. BTL has been advised that the cost of debt finance would be 2.92%pa due to its relative risk The current Earnings Before Interest and Tax (EBIT) is $7.000.000 The company tax rate is 30% Previous Calculate the Earnings Per Share of this option (Round your answer to 2 decimal places. For example, if your answer is 0.66666666-> Enter your answer as 0.67)

Answer rating: 100% (QA)

The amount of debt financing that BTL would receive ... View the full answer