Write the equation in slope-intercept form. Then find the slope and y-intercept of the line. 2x +6y = 11

Ghost, Inc., has no debt outstanding and a total market value of $369,600. Earnings before interest and taxes, EBIT, are project

arlik [135]

Answer:

Ghost Inc.

A1.

Earnings Per share (EPS)

EPS in normal projection is $4.61 per share

EPS in an expansion is $5.31 Per share

EPS in a recession is $3.51 Per share

A2.

Changes to EPS in an expansion is +15.18%

Changes to EPS in a recession is -23.86%

B1.

Earnings Per share (EPS)

EPS in normal projection is $7.23 per share

EPS in an expansion is $8.62 Per share

EPS in a recession is $5.01 Per share

B2.

Changes to EPS in an expansion is +19.23%

Changes to EPS in a recession is -30.71%

Step-by-step explanation:

Underlying Information:

Earnings before interest and taxes, EBIT projections = $51,000

Expansionary EBIT projections = $51,000 x (100% + 15%) = $58,650

Recessionary EBIT projections = $51,000 x (100% -24%) = $38,760

Tax Rate = 24%

Market to Book Ratio = 1.0

Stock Price is constant.

Solution to A1.

Scenario 1 (Projected Earnings)

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBIT minus tax = $51,000 - ($51,000 x 24%)

= $51,000 - $12240

= $38,760

Outstanding shares in issue = 8,400 ordinary Shares

EPS = $38,760 divided by 8,400 shares = $4.61 Per share

Scenario 2 (Projected Earnings in a strong expansion)

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBIT minus tax = $58,650 - ($58,650 x 24%)

= $58,650 - $14,076

= $44,574

Outstanding shares in issue = 8,400 ordinary Shares

EPS = $44,574 divided by 8,400 shares = $5.31 Per share

Scenario 3 (Projected Earnings in a Recession)

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBIT minus tax = $38,760 - ($38,760 x 24%)

= $38,760 - $9,302.4

= $29,457.6

Outstanding shares in issue = 8,400 ordinary Shares

EPS = $44,574 divided by 8,400 shares = $3.51 Per share

Solution to A2.

1.Changes to EPS in an expansion = EPS (Expansion) minus EPS (normal projection), all divided by EPS (normal projection)

= (5.31 - 4.61) / 4.61

= +15.18% change during an expansion

2.Changes to EPS in a recession = EPS (Recession) minus EPS (normal projection), all divided by EPS (normal projection)

= (3.51 - 4.61) / 4.61

= -23.86% change during a recession

Underlying Information:

Debt issue = $185,000

Interest on debt issued = 6% = $11,100

Market to Book Ratio = 1.0

Stock Price is constant.

Therefore Share Price = Market Value divided by Outstanding shares in issue = 369,600 / 8400 = $44

This implies our proceeds of $185,000 from debt issue would have repurchased $185,000 divided by $44 = 4,205 ordinary shares

This decision to repurchase its shares indicates the shares outstanding will reduce by 4,205. New outstanding shares will now be 4,195 shares

*Earnings before interest and taxes, EBIT normal projections = $51,000 & Earnings Before Tax (EBT) = $51,000 minus $11,100 (debt interest) = $39,900

*Expansionary EBIT projections = $51,000 x (100% + 15%) = $58,650 & Earnings Before Tax = $58,650 minus $11,100 (debt interest) = $47,550

*Recessionary EBIT projections = $51,000 x (100% -24%) = $38,760 & Earnings Before Tax = $38,760 minus $11,100 (debt interest) = $27,660

Tax Rate = 24%

Solution to B1.

Scenario 1 (Projected Earnings)

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBT minus tax = $39,900 - ($39,900 x 24%)

= $39,900 - $9,576

= $30,324

Outstanding shares in issue = 4,195 ordinary Shares

EPS = $30,324 divided by 4,195 shares = $7.23 Per share

Scenario 2 (Projected Earnings in a strong expansion)

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBT minus tax = $47,550 - ($47,550 x 24%)

= $47,550 - $11,412

= $36,138

Outstanding shares in issue = 4,195 ordinary Shares

EPS = $36,138 divided by 4,195 shares = $8.62 Per share

Scenario 3 (Projected Earnings in a Recession)

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBT minus tax = $27,660 - ($27,660 x 24%)

= $27,660 - $6,638.40

= $21,021.60

Outstanding shares in issue = 4,195 ordinary Shares

EPS = $21,021.60 divided by 4,195 shares = $5.01 Per share

Solution to B2.

1.Changes to EPS in an expansion = EPS (Expansion) minus EPS (normal projection), all divided by EPS (normal projection)

= (8.62 - 7.23) / 7.23

= +19.23% change during an expansion

2.Changes to EPS in a recession = EPS (Recession) minus EPS (normal projection), all divided by EPS (normal projection)

= (5.01 - 7.23) / 7.23

= -30.71% change during a recession

6 0

3 years ago

The us postal service handles 170000000000 pieces of mail each year. This is 40% of the world's total. How many pieces of mail a

labwork [276]

425000000000 cuz you do 17000000000 divided by .4

4 0

3 years ago

let x1,x2, and x3 be linearly independent vectors in R^(n) and let y1=x2+x1; y2=x3+x2; y3=x3+x1. are y1,y2,and y3 linearly indep

Nutka1998 [239]

Answer with Step-by-step explanation:

We are given that

$x_1,x_2$ and $x_3$ are linearly independent.

By definition of linear independent there exits three scalar $a_1,a_2$ and $a_3$ such that

$a_1x_1+a_2x_2+a_3x_3=0$

Where $a_1=a_2=a_3=0$

$y_1=x_2+x_1,y_2=x_3+x_2,y_3=x_3+x_1$

We have to prove that $y_1,y_2$ and $y_3$ are linearly independent.

Let $b_1,b_2$ and $b_3$ such that

$b_1y_1+b_2y_2+b_3y_3=0$

$b_1(x_2+x_1)+b_2(x_3+x_2)+b_3(x_3+x_1)=0$

$b_1x_2+b_1x_1+b_2x_3+b_2x_2+b_3x_3+b_3x_1=0$

$(b_1+b_3)x_1+(b_2+b_1)x_2+(b_2+b_3)x_3=0$

$b_1+b_3=0$

$b_1=-b_3$ ...(1)

$b_1+b_2=0$

$b_1=-b_2$ ..(2)

$b_2+b_3=0$

$b_2=-b_3$ ..(3)

Because $x_1,x_2$ and $x_3$ are linearly independent.

From equation (1) and (3)

$b_1=b_2$ ...(4)

Adding equation (2) and (4)

$2b_1==0$

$b_1=0$

From equation (1) and (2)

$b_3=0,b_2=0,b_3=0$

Hence, $y_1,y_2$ and $y_3$ area linearly independent.

5 0

3 years ago

How do I do any of this?!

evablogger [386]

U should get the app "photomath" it will help u out alot!!!

7 0

3 years ago

What is the answer to -6 -(6)

kicyunya [14]

Answer:

The answer is 0

6 0

3 years ago

Read 2 more answers