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WARRIOR [948]
3 years ago
14

ound Hammer is comparing two different capital structures: An all-equity plan (Plan I) and a levered plan (Plan II). Under Plan

I, the company would have 160,000 shares of stock outstanding. Under Plan II, there would be 110,000 shares of stock outstanding and $1.4 million in debt outstanding. The interest rate on the debt is 7 percent, and there are no taxes. a. If EBIT is $400,000, what is the EPS for each plan
Business
1 answer:
noname [10]3 years ago
6 0

Answer:EPS of Plan I = $2.50

EPS of Plan II = $2.75

Explanation:

Plan I  Earning per share (EPS) = EBIT ÷ Number of shares

= $400,000 / 160,000 = $2.50

Plan II

Given that  

debt outstanding = $1.4 million and interest rate on debt is 7percent

Interest = $1,400,000 × 7% = $98,000

Plan II's EPS= (EBIT - Interest ) ÷ Number of shares

= ($400,000 - $98,000 )/  110,000

= 302,000/  110,000=2.75

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Principal

Explanation:

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4 years ago
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A new mother asks the nurse, "I was told that my infant received my antibodies during pregnancy. Does that mean that my infant i
rosijanka [135]

Answer:

The immune system of an infant is immature, and the infant is at risk for infection."

Explanation:

When a new baby is born, the antibodies of the mother is transferred to the baby when she is pregnant. And these antibodies will remain in the body for the entire life and will protect her from any infections.

           When the mother asked the nurse about the protection of her infant in case of any infection because the mother was told that her infant will received  her antibodies during pregnancy, the nurse answered the mother by explaining they the immune system of the new born is not mature at this stage so the infant is likely to be affected by germs and infections and will fall ill. Now the infant is at risk for infection.

6 0
4 years ago
Zachariah is the sole shareholder of an S corporation in Detroit, Michigan. At a time when his stock basis is $10,000, the corpo
lubasha [3.4K]

Answer:

B) $90,000

Explanation:

Distribution of appreciated property to the stockholders of an S Corporation are taxable, and must be recorded at fair market value. In this case, Zachariah is the only stockholder, but the same rule applies. Zachariah's taxable gain = fair market value - stock basis = $100,000 - $10,000 = $90,000.

8 0
3 years ago
When Carolina is in the grocery store buying milk for her children, she picks up a tube of toothpaste at the same time. The toot
yKpoI14uk [10]

A relatively inexpensive item that merits little shopping effort, is called Convenience product.

<h3>What is the Product?</h3><h3></h3>

Product refers to the finished goods or the material that has been converted from the raw material to fulfill the needs of the customer. There are four types of product i.e. convenience goods, shopping goods, specialty products, and unsought goods.

Convenience product is that type of the product which can be purchased with the minimal efforts because it is cheap in value and can be purchased frequently.

In the above case, Carolina picks up the toothpaste which is the example of the Convenience product.

Learn more about Convenience product here:

brainly.com/question/7184191

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7 0
2 years ago
A governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances reported expenditures of $30 million, incl
Gala2k [10]

Answer:

Increase of $1 million.

Explanation:

Depreciation expense = (Capital assets cost - Land cost) ÷ Average Years

                                     = (90 - 10) ÷ 20

                                     = $4 million

Reconciliation from governmental changes in fund balances to governmental activities changes in net assets would reflect:

= capital outlay expenditures - Depreciation expense

= 5 million - 4 million

= $1 million

Therefore, there is an increase of $1 million.

3 0
3 years ago
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