EBIT of the company before interest and taxes - 2 million $, interest on current debts...

 

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EBIT of the company before interest and taxes - 2 million $, interest on current debts - 0.4 million $, the number of ordinary shares - 5000, the income tax rate - 20%. The company needs 3 million $ to finance the project. This project is like is expected to increase annual EBIT by $ 0.6 million. Release options being considered 1000 shares and a loan at 10% per annum. What option will you offer shareholders? Calculate yours answer. Build a graph if you can (or calculate point of indifference). EBIT of the company before interest and taxes - 2 million $, interest on current debts - 0.4 million $, the number of ordinary shares - 5000, the income tax rate - 20%. The company needs 3 million $ to finance the project. This project is like is expected to increase annual EBIT by $ 0.6 million. Release options being considered 1000 shares and a loan at 10% per annum. What option will you offer shareholders? Calculate yours answer. Build a graph if you can (or calculate point of indifference).

Answer rating: 100% (QA)

EPS when the new project is financed by equit... View the full answer