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blagie [28]
3 years ago
9

Holly's is currently an all-equity firm that has 12,000 shares of stock outstanding at a market price of $36 a share. The firm h

as decided to leverage its operations by issuing $120,000 of debt at an interest rate of 7.2 percent. This new debt will be used to repurchase shares of the outstanding stock. The restructuring is expected to increase the earnings per share. What is the minimum level of earnings before interest and taxes that the firm is expecting? Ignore taxes.$31,104$40,516$42,000$37,141$45,020
Business
1 answer:
vagabundo [1.1K]3 years ago
8 0

Answer:

$31,104

Explanation:

EBIT / 12,000

= [EBIT - ($120,000 × .072)] / [12,000 - ($120,000 / $36)]

EBIT = $31,104

Therefore the minimum level of earnings before interest and taxes that the firm is expecting will be $31,104

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Answer – Quitting your job to find another
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After identifying the purpose of your message, you should select the most appropriate communication channel. When determining th
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For an effective communication to take place the selection of the most appropriate channel ( medium for convening information) for the intended audience is very important

Explanation:

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3 years ago
The following cost data pertain to the operations of Montgomery Department Stores, Inc., for the month of July. Corporate legal
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Answer:

1.$134,000

2.$183,800

3.$124,050

Explanation:

1. Computation for the total amount of the costs that are direct costs of the Apparel Department

Apparel Department cost of sales - Evendale store $116,100

Apparel Department sales commission-Evendale store $7,950

Apparel Department manager's salary-Evendale store $9,950

Total direct costs for the Apparel Department

$134,000

2. Computation for the total amount of the costs that are direct costs of the Evendale Store

Apparel Department cost of sales - Evendale store $116,100

Store managers salary - Evendale store $18,300

Apparel Department sales commission-Evendale store $7,950

Store utilities - Evendale store $17,800

Janitorial costs - Evendale store $13,700

Apparel Department manager's salary-Evendale store $9,950

Total direct cost for the Evendale store $183,800

3. Computation for the total amount of the Apparel Department's direct costs that are variable costs with respect to total departmental sales

Apparel Department cost of sales - Evendale store $116,100

Apparel Department sales commission-Evendale store $7,950

Total variable cost-Apparel department $124,050

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Answer:

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