Please answer both

King Lyon has the following assets: Current assets $2, 500, 000 Capital assets 7,506,090 Total assets $10,060,090 During 4 months of the year, current assets drop to $1,000,000 (total assets will then be $8,500,000). Its operating profit (EBIT) is expected to be $486,500. Its tax rate is 20 percent. Shares are valued at $17. Its capital structure is short-term financing at 2 percent and long-term financing of 40 percent equity, 60 percent debt at 4 percent. a. Calculate expected EPS if the firm is perfectly hedged. (Do not round intermediate calculations and round your final answer to 2 decimal places.) EPS $ 1.17 0 Prev. 5 of 6 ili Next > Nighthawk Steel, a manufacturer of specialized tools, has $5,100.000 in assets. Temporary current assets $1, 200,608 Permanent current assets 1,700,000 Capital assets 2, 200, 000 Total assets $5, 100,080 Short-term rates are 6 percent. Long-term rates are 8.5 percent. (Note that long-term rates imply a return to any equity). Earnings before interest and taxes are $1,060,000. The tax rate is 25 percent. Assume the term structure of interest rates becomes inverted. with short-term rates going to 11 percent and long-term rates 5.5 percentage points lower than short-term rates.. If long-term financing is perfectly matched (hedged) with long-term asset needs, and the same is true of short-term financing, what will earnings be after taxes? For an example of perfectly hedged plans, see Figure 6-8. Earning after taxes