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Amanda [17]
3 years ago
8

Cross Town Cookies is an all-equity firm with a total market value of $695,000. The firm has 46,000 shares of stock outstanding.

Management is considering issuing $146,000 of debt at an interest rate of 8 percent and using the proceeds to repurchase shares. Before the debt issue, EBIT will be $60,800. What is the EPS if the debt is issued? Ignore taxes.
Business
1 answer:
Anika [276]3 years ago
3 0

Answer:

$1.67

Explanation:

The amount of shares that was repurchased is:

$300,000/($4,187,100/127,500)

= 9,135 shares

Outstanding shares is:

127,500-9,135

= 118,365 shares

Therefore, the EPS is:

= [$215,600 - ($300,000×.06)]/118,365.

= $1.67

Thus, the amount EPS after the debt was issued is $1.67

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The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical
user100 [1]

Answer:

MPLF/MPLC; becomes steeper

Explanation:

The slope of a country's production possibility frontier with cloth measured on the horizontal and food measured on the vertical axis in the specific factors model is equal to MPLF/MPLC and it becomes steeper as more cloth is produced.

Where

- MPLC is Marginal Product of Labor for Cloth.

- MPLF is Marginal Product of Labor for Food.

5 0
3 years ago
Read 2 more answers
Clabber Company has bonds outstanding with a par value of $119,000 and a carrying value of $108,700. If the company calls these
Vladimir79 [104]

Answer:

option (b) $4,200 gain

Explanation:

Data provided in the question:

Par value of outstanding bonds  = $119,000

Carrying value of the bonds = $108,700

Price at which bond is called = $104,500

Now,

Gain on the retirement is calculated using the relation as;

Gain on retirement

= Carrying value of Bonds - Price at which bond is called

= $108,700 - $104,500

= $4,200

Since, the result is positive, therefore a gain will be recognized

Hence, correct answer is option (b) $4,200 gain

6 0
3 years ago
JTL has 148,000 shares of stock outstanding. The firm has extra cash so it announced this morning that it is willing to repurcha
MrRissso [65]

Answer:

A tender offer.

Explanation:

This is simple explained to be the offer put to place to execute a work or even services for a said/given price. These offers are typically said to be done publicly; shareholders in some cases a been put to place to sell their shares for a specified price and within a particular window of time. Target sales orders which are been tabled/offered are been usually placed at certain premium value which are effective in market price and is often contingent upon a minimum or a maximum number of shares sold. In many other cases, tender are seen to be in security forms or other non-cash alternatives are offered in exchange for shares.

3 0
3 years ago
Loss of network audience and the rise of cable have resulted in a new way for affiliates to receive compensation. _____________
murzikaleks [220]

Answer:

The correct answer is letter "C": Reverse compensation.

Explanation:

Reverse compensation is the practice by which television stations pay a television network for its affiliation to the network. This approach performed in the <em>U.S. broadcasting system</em> is called reverse because it aims to compensate networks for the advertising time used by the television stations while their programming is on the air.

5 0
3 years ago
In 1–3 sentences, explain the role of entrepreneurs in the economy.
jenyasd209 [6]

ANSWER: There are many ways how entrepreneurs benefit the economy. Few of them are

1) Create Jobs: Entrepreneurs create jobs in the community. When someone opens a new business or expands his new business, he will need human resource to help him to do his works.

2) Wealth Creation: Entrepreneurs pool in their own money and attract investment from lenders, banks and other investors. This mobilizes public wealth.

3) Exports: Entrepreneurs after growing in their businesses will want to export their products as a part of extending their market. This will help gain foreign currency in the country.

4 0
3 years ago
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