Question: Please show how to work out problems thank you Using EBIT of $8,000,000, a 40% tax rate, and the information developed in parts a and
Using EBIT of $8,000,000, a 40% tax rate, and the information developed in parts a and b, calculate the most likely earnings per share for the firm at various levels of indebtedness. Mark the level of indebtedness that maximizes EPS. d. Using the EPS developed in part c, the estimates of required return, F_as and Equation 13, 12, estimate the value per share at various levels of indebtedness. Mark the level of indebtedness in the following table that results in the maximum price per share, P_0. e. Prepare a recommendation to the board of directors of Morales Publishing that specifies the degree of indebtedness that will accomplish the firm's goal of optimizing shareholder wealth. Use your findings in parts a through d to justify your recommendation. Using EBIT of $8,000,000, a 40% tax rate, and the information developed in parts a and b, calculate the most likely earnings per share for the firm at various levels of indebtedness. Mark the level of indebtedness that maximizes EPS. d. Using the EPS developed in part c, the estimates of required return, F_as and Equation 13, 12, estimate the value per share at various levels of indebtedness. Mark the level of indebtedness in the following table that results in the maximum price per share, P_0. e. Prepare a recommendation to the board of directors of Morales Publishing that specifies the degree of indebtedness that will accomplish the firm's goal of optimizing shareholder wealth. Use your findings in parts a through d to justify your recommendation
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