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iogann1982 [59]
3 years ago
8

Haskell Corp. is comparing two different capital structures. Plan I would result in 12,000 shares of stock and $100,000 in debt.

Plan II would result in 8,700 shares of stock and $155,000 in debt. The interest rate on the debt is 5 percent. Compare both of these plans to an all-equity plan assuming that EBIT will be $80,000. The all-equity plan would result in 18,000 shares of stock outstanding. Assuming that the corporate tax rate is 40 percent, what is the EPS for each of these plans
Business
1 answer:
posledela3 years ago
3 0

Answer:

Earnings per share (EPS) = (net income - preferred dividends) / average number of outstanding shares

EPS for all equity plan:

($80,000 x 60%) / 18,000 = $2.67 per share

EPS for Plan I:

[($80,000 - $5,000) x 60%] / 12,000 = $3.75 per share

EPS for Plan II:

[($80,000 - $7,750) x 60%] / 8,700 = $4.98 per share

You might be interested in
The rule of 70 is a measure of how long it will take for prices to __________ at a given inflation rate.
swat32

Answer:

A. double

Explanation:

Rule 70 is used to calculate the numbers of years it takes for an investment  or variable to double in value given a certain growth rate. In this case, the variable is prices and the growth rate is  inflation  rate. It is calculated by dividing number 70 by inflation rate.

For example;

Assume inflation rate is 6%, the prices will double in ; 70/6 = 11.7 years

And if inflation is 2%, the prices will double in 70/2 = 35 years

8 0
3 years ago
Managers, for instance, have personal power because they control your pay, your work assignments, your hiring and firing, and yo
daser333 [38]

Answer:

False

Explanation:

Managers exercise legitimate and coercive power. Their power is legitimate since it is lawful owing to the job position and their tasks and duties. It is coercive since it induces the subordinates to perform their tasks in a certain way and at times subject them to performance pressure so as they work efficiently.

Experts and referent represent personal or individual power possessed by an individual, independent of the job position he/she occupies. These may arise more out of an individual's own knowledge and information one possesses or on account of personal traits and do not represent a power which has been delegated.

Such powers may collide when an individual is promoted and when required to manage those, who were earlier his/her colleagues.

8 0
3 years ago
Marigold Company uses a periodic inventory system. For April, when the company sold 550 units, the following information is avai
Mars2501 [29]

Answer:

Marigold Company

Cost of goods sold = $9,119

Ending inventory = $7,461

Explanation:

a) Data and Calculations:

                            Units    Unit Cost    Total Cost

April 1 inventory    250         $14            $ 3,500

April 15 purchase  420           17                 7,140

April 23 purchase 330           18                5,940

Total                    1,000                           $16,580

Weighted-average costs   $16.58

Sales                     550

Cost of goods sold = 550 * $16.58 = $9,119

Ending inventory = 450 * $16.58 = $7,461

b) The first computation is for the total cost of goods available, which is then divided by the total units available for sale.  This gives the weighted-average cost per unit.  This unit cost is then multiplied with the units of ending inventory and sales to obtain the cost of the ending inventory and the cost of goods sold, respectively.

8 0
3 years ago
If consumer has rational, monotonic and convex preferences, which of the following is true concerning the substitution effect of
Zanzabum

Answer:

It will lead to an increase in consumption of good X only if X is a normal good ( D )

Explanation:

If consumer has rational, monotonic and convex preference the decrease in price of good X will lead to an increase in consumption of good X only if X is a Normal good .

This is because the demand for Normal goods increases with increase in consumers income. therefore <em>a decrease in price will automatically lead to an increase in demand because of the increase in the purchasing power of the consumer's income.</em>

5 0
3 years ago
Ashley, Nikki and Jared all selected identical new cars at the same price. Ashley, bought the car with some of his own money and
Romashka [77]
Nikki as the option to choose the less expensive liability-only insurance coverage.<span>
</span>
6 0
3 years ago
Read 2 more answers
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