Question: Need help with a and b Homework: Debt Policyr Assignment 0 Saved 2 points eBook River Cruises is ailequitynanced with 100,000 shares. It now proposes

Need help with a and b

Homework: Debt Policyr Assignment 0 Saved 2 points eBook River Cruises is ailequitynanced with 100,000 shares. It now proposes to issue $340,000 of debt at an interest rate of 12% and use the proceeds to repurchase 34,000 shares at $10 per share. Prots before interest are expected to be $134,000. a. What is the ratio of price to expected earnings for River Cruises before it borrows the $340,000? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price-earrings ralil] [ I b. What is the ratio after it borrows?I (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price-earrings ratio [

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