Question: Create a Projected EPS/EBIT analysis Common Stock Financing Debt Financing Stock Recession Normal Boom Recession Normal Boom Recession Normal Boom EBIT $0 $0 $0 $0

Create a Projected EPS/EBIT analysis

Common Stock Financing

Debt Financing

Stock

Recession

Normal

Boom

Recession

Normal

Boom

Recession

Normal

Boom

EBIT

$0

$0

$0

$0

$0

$0

$0

$0

$0

Interest

0

0

0

0

0

0

0

0

0

EBT

0

0

0

0

0

0

0

0

0

Taxes

0

0

0

0

0

0

0

0

0

EAT

0

0

0

0

0

0

0

0

0

# Shares

0

0

0

0

0

0

0

0

0

EPS

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

Here are some entries you may want to consider:

EBIT Normal: $3,589 million (Assumption: from February 1, 2015 Income Statement)

EBIT Recession: $3,100 million (Assumption: earnings lower during recession)

EBIT Boom: $4,200 million (Assumption: earnings higher during boom)

Interest rate: 3.5% (Prime interest rate)

Tax rate: 38% (Assumption: Tax / EBIT both figures from February 1, 2015 Income Statement)

Percent Equity Used to Finance: 70% (Assumption: Beginning point of analysis; Any combination of equity/debt financing can be used)

Percent Debt Used to Finance: 30% (Assumption: Beginning point of analysis

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