Simplify the expression below. 5xy2 - 3x + 2y2 + 7x + 13xy2

Ghost, Inc., has no debt outstanding and a total market value of $369,600. Earnings before interest and taxes, EBIT, are project

arlik [135]

Answer:

Ghost Inc.

A1.

Earnings Per share (EPS)

EPS in normal projection is $4.61 per share

EPS in an expansion is $5.31 Per share

EPS in a recession is $3.51 Per share

A2.

Changes to EPS in an expansion is +15.18%

Changes to EPS in a recession is -23.86%

B1.

Earnings Per share (EPS)

EPS in normal projection is $7.23 per share

EPS in an expansion is $8.62 Per share

EPS in a recession is $5.01 Per share

B2.

Changes to EPS in an expansion is +19.23%

Changes to EPS in a recession is -30.71%

Step-by-step explanation:

Underlying Information:

Earnings before interest and taxes, EBIT projections = $51,000

Expansionary EBIT projections = $51,000 x (100% + 15%) = $58,650

Recessionary EBIT projections = $51,000 x (100% -24%) = $38,760

Tax Rate = 24%

Market to Book Ratio = 1.0

Stock Price is constant.

Solution to A1.

Scenario 1 (Projected Earnings)

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBIT minus tax = $51,000 - ($51,000 x 24%)

= $51,000 - $12240

= $38,760

Outstanding shares in issue = 8,400 ordinary Shares

EPS = $38,760 divided by 8,400 shares = $4.61 Per share

Scenario 2 (Projected Earnings in a strong expansion)

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBIT minus tax = $58,650 - ($58,650 x 24%)

= $58,650 - $14,076

= $44,574

Outstanding shares in issue = 8,400 ordinary Shares

EPS = $44,574 divided by 8,400 shares = $5.31 Per share

Scenario 3 (Projected Earnings in a Recession)

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBIT minus tax = $38,760 - ($38,760 x 24%)

= $38,760 - $9,302.4

= $29,457.6

Outstanding shares in issue = 8,400 ordinary Shares

EPS = $44,574 divided by 8,400 shares = $3.51 Per share

Solution to A2.

1.Changes to EPS in an expansion = EPS (Expansion) minus EPS (normal projection), all divided by EPS (normal projection)

= (5.31 - 4.61) / 4.61

= +15.18% change during an expansion

2.Changes to EPS in a recession = EPS (Recession) minus EPS (normal projection), all divided by EPS (normal projection)

= (3.51 - 4.61) / 4.61

= -23.86% change during a recession

Underlying Information:

Debt issue = $185,000

Interest on debt issued = 6% = $11,100

Market to Book Ratio = 1.0

Stock Price is constant.

Therefore Share Price = Market Value divided by Outstanding shares in issue = 369,600 / 8400 = $44

This implies our proceeds of $185,000 from debt issue would have repurchased $185,000 divided by $44 = 4,205 ordinary shares

This decision to repurchase its shares indicates the shares outstanding will reduce by 4,205. New outstanding shares will now be 4,195 shares

*Earnings before interest and taxes, EBIT normal projections = $51,000 & Earnings Before Tax (EBT) = $51,000 minus $11,100 (debt interest) = $39,900

*Expansionary EBIT projections = $51,000 x (100% + 15%) = $58,650 & Earnings Before Tax = $58,650 minus $11,100 (debt interest) = $47,550

*Recessionary EBIT projections = $51,000 x (100% -24%) = $38,760 & Earnings Before Tax = $38,760 minus $11,100 (debt interest) = $27,660

Tax Rate = 24%

Solution to B1.

Scenario 1 (Projected Earnings)

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBT minus tax = $39,900 - ($39,900 x 24%)

= $39,900 - $9,576

= $30,324

Outstanding shares in issue = 4,195 ordinary Shares

EPS = $30,324 divided by 4,195 shares = $7.23 Per share

Scenario 2 (Projected Earnings in a strong expansion)

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBT minus tax = $47,550 - ($47,550 x 24%)

= $47,550 - $11,412

= $36,138

Outstanding shares in issue = 4,195 ordinary Shares

EPS = $36,138 divided by 4,195 shares = $8.62 Per share

Scenario 3 (Projected Earnings in a Recession)

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBT minus tax = $27,660 - ($27,660 x 24%)

= $27,660 - $6,638.40

= $21,021.60

Outstanding shares in issue = 4,195 ordinary Shares

EPS = $21,021.60 divided by 4,195 shares = $5.01 Per share

Solution to B2.

1.Changes to EPS in an expansion = EPS (Expansion) minus EPS (normal projection), all divided by EPS (normal projection)

= (8.62 - 7.23) / 7.23

= +19.23% change during an expansion

2.Changes to EPS in a recession = EPS (Recession) minus EPS (normal projection), all divided by EPS (normal projection)

= (5.01 - 7.23) / 7.23

= -30.71% change during a recession

6 0

2 years ago

On a road map, the locations A, B and C are collinear. Location C divides the road from location A to B, such that AC:CB = 1:2.

koban [17]

Answer:

C. (-1,-2)

Step-by-step explanation:

Since C internally divides AB in the ratio AC/CB = 1/2 = m/n where m = 1 and n = 2, we use the formula for internal division.

Let A = (x₁, y₁) = (5, 16), B = (x₂, y₂) and C = (x, y) = (3, 10)

So x = (mx₂ + nx₁)/(m + n)

y = (my₂ + ny₁)/(m + n)

Substituting the values of the coordinates, we have

x = (mx₂ + nx₁)/(m + n)

3 = (1 × x₂ + 2 × 5)/(2 + 1)

3 = (x₂ + 10)/3

multiplying through by 3, we have

9 = x₂ + 10

x₂ = 9 - 10

x₂ = -1

y = (my₂ + ny₁)/(m + n)

10 = (1 × y₂ + 2 × 16)/(2 + 1)

10 = (x₂ + 32)/3

multiplying through by 3, we have

30 = y₂ + 32

y₂ = 30 - 32

y₂ = -2

So, the coordinates of B are (-1, -2)

3 0

2 years ago

jada goes to get her hair done the cost for a haircut and blowout is 65.42 she leaves a 25% tip for the stylist what is the tota

Art [367]

Answer:

The total cost is $81.78

Step-by-step explanation:

First lets calculate the tip

tip = cost * percent of tip

tip = 65.42*.25

tip = 16.355

Which rounds to 16.36 since we are working with money and round to the nearest cent

total cost = cost of cut and blowout + tip

= 65.42 +16.36

=81.78

4 0

2 years ago

Read 2 more answers

What are two subsets of real numbers that form the set of real numbers

Ulleksa [173]

Answer:

Two subsets that form set of real numbers

You can take positive numbers and negative numbers subset

One subset become (- infinity,0]

other subset (0, infinity)

4 0

2 years ago

Please help this seems impossible.

MatroZZZ [7]

Answer:

hlo XD

no its not looking difficult

it is difficult

6 0

2 years ago