Christensen & Assoc. is developing an asset financing plan. Christensen has $500,000 in Current Assets (of which 40% are considered temporary) and $900,000 in Capital Assets. 5 A) Assuming a perfect hedge, how much of the assets should be financed with short term financing? How much with long term financing? 2 B) Ignore the perfectly hedged calculation above. Assume all capital assets are financed with long-term financing. The remaining assets are financed with short term financing. Capital structure is either short-term financing at 7% or equity (no long term debt). Shares are valued at $20. Calculate Earnings After Taxes (EAT) and Earnings per Share (EPS) If EBIT = $325,000 and the tax 5 rate is 25%