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Law Incorporation [45]
2 years ago
7

Copybold Corporation is a start-up company that has a capital structure with a debt/assets ratio equal to 0.75. Copybold has no

preferred stock. There are two possible scenarios with respect to the firm's operations : Feast or Famine. The Feast scenario has a 60 percent probability of occurring, and the forecast earnings before interest and taxes (EBIT) in this scenario is $60,000. The Famine scenario has a 40 percent chance of occurring, and the EBIT is expected to be $20,000. Further, the firm's cost of debt is 12 percent. The firm has $400,000 in total assets, and its marginal tax rate is 40 percent. The company has 10,000 shares of stock outstanding. What is the difference between the earnings per share (EPS) forecasts for the Feast scenario and the Famine scenario
Business
1 answer:
galben [10]2 years ago
8 0

Answer:

The value of the difference between the earnings per share (EPS) forecasts for Feast and Famine is $2.40

Explanation:

The solution is as evident in the attached Excel Sheet. In the excel sheet the formulas are used which are also given in the second sheet.

For the data values from the question are used.

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Alekssandra [29.7K]
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3 0
3 years ago
In an attempt to have funds for a down payment, Jan Carlson plans to save $3,700 a year for the next five years. With an interes
Sveta_85 [38]

Answer:

$20,857.24

Explanation:

This is an ordinary annuity question which can be solved using a financial calculator. The inputs are as follows;

Total duration of investment; N = 5

Interest rate per year; I/Y = 6%

Recurring annual payment;  PMT = 3,700

One time cashflow; PV = 0

then compute the future value of the annuity; CPT FV = 20,857.244

Therefore, Jan will have $20,857.24 as down payment in 5 years.

7 0
3 years ago
There is no such thing as a free lunch.This statement best reflects the fact that a. consumers are unwilling to pay for a good u
Alexandra [31]

Answer:  Option B

   

Explanation: Opportunity cost refers to the of loss of profit when an individual or firm chooses one alternative over other.

The statement in the given case, depicts the opportunity cost one has to pay of using the scarce resources  that could be sued on different alternatives.

The lunch is never free depicts that one could have used it in other alternatives that may have produced some economic benefits.

Hence, the correct option is B.

6 0
3 years ago
How does demand-pull inflation differ from cost-push inflation?
kicyunya [14]
<span>Demand-pull inflation is asserted to arise when aggregate demand in an economy outpaces aggregate supply. It involves inflation rising as real gross domestic product rises and unemployment falls, as the economy moves along the Phillips curve. This is commonly described as "too much money chasing too few goods".</span>
4 0
3 years ago
Read 2 more answers
The quality assurance committee has completed a study that reviewed preoperative and pathologic diagnosis. Upon review of the st
luda_lava [24]

Answer:

The given findings should be reviewed by the <u>tissue committee.</u>

Explanation:

The tissue committee is a committee in a hospital or health care facility that is responsible for preventing unnecessary surgeries, evaluating the performed surgeries and detecting delays in performing a surgical procedure.  This committee is also responsible for reviewing preoperative and postoperative diagnoses with the pathological findings.

<u>Therefore, the given findings should be reviewed by the </u><u>tissue committee.</u>

8 0
3 years ago
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