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Nutka1998 [239]
3 years ago
12

Control Inc. has no debt and a total market value of $100,000. EBIT are projected to be 6,000 if economic conditions are normal.

If there is an expansion in the economy, then EBIT will be 30% higher. If there is a recession, then EBIT will be 60% lower. Control Inc. is considering a $40,000 debt issue with a 5% interest rate. The proceeds will be used to repurchase shares of stock. Currently there are 2500 shares outstanding. Ignore taxes.
1. Calculate earning per share for the case of strong expansion period before any debt is issued:

3.12

3.95

4.82

5.18

6.02
Business
1 answer:
Zinaida [17]3 years ago
5 0

Answer:

$3.12

Explanation:

For expansion:

EBT = EBIT - Interest

       = [6,000 + (30% × 6,000)] - $0

      = $7,800

Net income = EBT - Tax

                   = $7,800 - $0

                   = $7,800

Earning per share for the case of strong expansion period before any debt is issued:

= Net income ÷ Number of shares outstanding

= $7,800 ÷ 2,500

= $3.12

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wariber [46]

Answer:

Accounting treatment (debit credit rules) of given entries

Explanation:

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2 years ago
Individuals who give up looking for work because they don't feel that there are good prospects of finding a job are known as:
lord [1]
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Correct answer: D
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8 0
3 years ago
The annual inventory of The Bike Shop Inc. shows the following information for mountain bikes: DATE QUANTITY COST TOTAL January
Nesterboy [21]

Answer:

$4,536

Explanation:

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5 0
3 years ago
If an investor purchases $1,000 face amount of an 8orporate bond at 93, and the bond is scheduled to mature in 2028, what will t
Nastasia [14]

The amount to be paid on maturity is $100,440

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Computation:

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Maturity is the date on which the life of a trade or financial instrument ends, after which it must be renewed or cease to exist. The life of a bond is the period during which its holder receives interest payments on their investment. When the bond matures, the holder will be refunded the face value. The maturity may change if the bond has a put or call option.

Learn more about Maturity here: brainly.com/question/9099365

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7 0
2 years ago
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AysviL [449]

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6 0
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