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Savatey [412]
3 years ago
7

In the following example, the proposed debt issue would raise $4,000,000; the interest rate would be 10%. In addition, the EBIT

would be $2,000,000. What would be the increase in the Earnings Per Share (EPS) from to current to the proposed structure
Business
1 answer:
topjm [15]3 years ago
6 0

Answer:

$1.67

Explanation:

The computation of the increase in earning per share is shown below:

But before that first we need to find out the current and proposed earning

per share

Particulars                       Current                       Proposed

<u>Number of shares        $400,000                    $240,000  (a) </u>

EBIT                                  $2,000,000               $2,000,000

Less:

Interest                                                                $400,000

                                                                   ($4,000,000 ×0.10)

EBT                                   $2,000,000               $1,600,000

Less

Taxes                                $0                               $0

Net income                       $2,000,000              $1,600,000 (b)

EPS                                    $5                              $6.67 (a ÷ b)

Increase in EPS

= $6.67 - $5

= $1.67

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Explanation: Taobao with over one billion listings,is owned and founded by Alibaba( a Chinese entrepreneur) in the year2003. Taobao is a market place for consumers of Products,it helps to create Opportunity for Businesses to market their products and services,this platform has helped to build the Chinese Economy empowering people and helping to improve creativity, It also helped Chinese entrepreneur to be accessible to the world over.

3 0
3 years ago
A copy machine cost when new and has accumulated depreciation of . Suppose discards this machine and receives nothing. What is t
Anna [14]

Answer:

$1,000 loss

Explanation:

The numbers are missing here, so I looked for a similar question:

A copy machine cost $5,000 when new and has accumulated depreciation of $4,000.

The carrying value of the copy machine = purchase cost - accumulated depreciation = $5,000 - $4,000 = $1,000

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7 0
3 years ago
Which of the following is not true of a budget
Ulleksa [173]
<span>A. Once you finish making your budget, you should not change it.</span>
6 0
3 years ago
The Federal Reserve conducts a $15 million open-market purchase of government bonds. If the required reserve ratio is 20 percent
Soloha48 [4]

Answer:

$200 million

$30 million

Explanation:

When the requiredreserce ratio is 15 percent or 0.15 , then the money multiplier is (1 / required reserve ratio) or (1/0.15 = 0.67)

Now, change in money supply = money multiplier * open market purchase of government bonds.

Here , the Federal Reserve a $30 million open market purchase Of govemment bonds.

As a result of this;

Money Supply increases by (6.7 * $30 million) = $200 million.

This is the maximum amount the money supply could Increase.

Now, if the bank holds. $30 million as excess reserves, then money supply could increase by as much as $30 million. This is the smallest amount themoney supply could increase.

So, If the required reserve ratio is 15 percent the largest possible increase in the money supply that could result is $200 million- and the smallest possible increase is $30 million.

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True or false: you should only create a slide presentation if you know that you will be presenting in a smart room.
siniylev [52]
The answer C i think hope this help


5 0
3 years ago
Read 2 more answers
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