1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Leokris [45]
2 years ago
9

Minion, Inc., has no debt outstanding and a total market value of $344,400. Earnings before interest and taxes, EBIT, are projec

ted to be $49,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 17 percent higher. If there is a recession, then EBIT will be 26 percent lower. The company is considering a $175,000 debt issue with an interest rate of 8 percent. The proceeds will be used to repurchase shares of stock. There are currently 8,200 shares outstanding. Assume the company has a market-to-book ratio of 1.0 and the stock price remains constant.a. Calculate earnings per share (EPS) under each of the three economic scenarios before any debt is issued. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. Calculate the percentage changes in EPS when the economy expands or enters a recession. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Business
1 answer:
loris [4]2 years ago
6 0

Answer:

A. $5.97

$6.99

$4.42

B. 17%

26%

Explanation:

A. If Economy conditions are normal

$49,000 / 8,200 shares = $5.97 each

If Economy expands

$49,000 * 117 / 100 = $57,330

$57,330 / 8,200 shares = $6.99 each

If Economy is in recession

$49,000 * 74 / 100 = $36,260

$36,260 / 8,200 = $4.42 each

B.

If Economy expands

$6.99 - $5.97 = $1.02

$1.02 / $5.97 * 100 = 17%

If Economy is in recession

$4.42 - $5.97 = -$1.55

-$1.55 / $5.97 = -26%

You might be interested in
Formal planning means specific goals are formulated and never reduced to writing but simply communicated.
Alexxx [7]
<span>The statement that formal planning means specific goals are formulated and never reduced to writing but simply communicated is false. 
</span><span>In opposite formal planning is type of strategic planning that includes writing of the organization's goals and objectives. The given definition refers to the informal planning. </span>
3 0
3 years ago
A news article details the destruction of a recent earthquake. Which of the following are readers of the article likely to do as
elena55 [62]

A news article details the destruction of a recent earthquake. Readers of the article likely to do as result are Overestimate their risk of earthquakes. Thus option A is correct.

<h3>What is Earthquake?</h3>

Earthquakes is referring to a kind of natural disaters which occurs due to the movement of tectonic plates. when these tectonic plates move and collapse with one another results in an earthquake.

When a news article shows destruction related to earthquakes people will most likely analyze their risk from earthquakes and evaluate whether they are safe from them or not.

Therefore, option A is appropriate.

Learn more about Earthquakes, here:

brainly.com/question/1296104

#SPJ1

7 0
2 years ago
Google this for me: How to handle analysis paralysis?
STatiana [176]
Here are the common technical causes of analysis paralysis: 

Analysis barely gives a clear answer as to what discussion is best.
The purpose of the analysis is not sufficiently clear, so analysts produce data that doesn't shed any light on what action to take.
7 0
3 years ago
Read 2 more answers
XYZ pays for 40% of its raw materials purchases in the month of purchase and 60% in the following month. Budgeted cost of materi
kirza4 [7]

Answer:

$265,150

Explanation:

Cost of material purchases in July

= 256,550 × 60/100

= 256,550×0.6

= 153,930

Cost of purchases in August

= 278,050×40/100

= 278,050×0.4

= 111,220

Total cash disbursement

= 111,220+153,930

= $265,150

4 0
3 years ago
Showing the amount and nature of donor-imposed restrictions on the statement of net assets helps financial statement users to as
KonstantinChe [14]

Answer and Explanation:

Corporate responsibility

7 0
3 years ago
Other questions:
  • What is the theory that tax cuts can raise supply called
    11·2 answers
  • What is a career fair?
    13·1 answer
  • Suppose a u.s. firm builds a factory in china, staffs it with chinese workers, uses materials supplied by chinese companies, and
    10·1 answer
  • Which of the following is a trait that effective leaders demonstrate?
    14·1 answer
  • BuyMart Inc. is a large chain of hypermarkets. It has cost benefits due to its extensive operation. The company's marketing and
    8·1 answer
  • Which of the following is an advantage of multiple-choice achievement tests over holistic performance-based assessments? Group o
    14·1 answer
  • 1) A global company can be headquartered anywhere, but usually most of its employees come
    7·1 answer
  • Which will help you when you file a claim for home insurance?
    6·2 answers
  • If a bank benefits when a foreign currency declines in value, then the bank must be in a __________ position. The term below tha
    9·1 answer
  • An investment has the following payment structure: 1,000 payable in one year, 1,000 payable in two years, and 1,000 payable in t
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!