Financial insecurity, discouragement, legal issues, long hours
Answer:
Company 1 = $2 per share
Company 2 = $2.50 per share
Explanation:
Given that,
EBIT for both companies = $1,000
Number of shares outstanding for company 1 = 500
Number of shares outstanding for company 2 = 300
Interest paid by company 2 = $250
EPS for company 1:
= (Total income - Preferred dividend) ÷ Shares outstanding
= ($1,000 - $0) ÷ 500
= $2 per share
EPS for company 2:
= (Total income - Preferred dividend) ÷ Shares outstanding
= ($1,000 - $250) ÷ 300
= $750 ÷ 300
= $2.50 per share
D is the answer I’m sure of it
Answer:
a) Market Value = $100 million × $20 = $2,000 million = $2 billion
Market value of equity would remain same = $2 billion
b) Market value would remain same after recap. Only market capitalization would reduce to half.
Market value of equity = 1 billion
c) Buying back shares increases the stock price which demonstrates the faith of the company in its work. But creditors have capital gains.
d) After recap and cash flow firm total value has increased to $2 billion + $100 Million = $2.1 billion and market value of equity has increased from $20 to $22 . ($1000 + $100)/50 = $22.
e) Equity shareholders have gained due to increase in there share value
Explanation: