The graph of a quadratic function has y-intercept 10 and one of its x-intercepts is 1

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

3 years ago

How do the gcf and the lcm help you when multiplying and adding or subracting fractions

kari74 [83]

<h3>Explanation:</h3>

GCF: the greatest common factor of numerator and denominator is a factor that can be removed to reduce the fraction.

Example

The numerator and denominator of 6/8 have GCF of 2:

6/8 = (2·3)/(2·4)

The fraction can be reduced by canceling those factors.

(2·3)/(2·4) = (2/2)·(3/4) = 1·(3/4) = 3/4

___

LCM: the least common multiple of the denominators is suitable as a common denominator. Addition and subtraction are easily performed on the numerators when the denominator is common.

Example

The fractions 2/3 and 1/5 can be added using a common denominator of LCM(3, 5) = 15.

2/3 + 1/5 = 10/15 + 3/15 = (10+3)/15 = 13/15

4 0

3 years ago

Is the equation = 0.25 + 0.5(– 2) linear or nonlinear?

ollegr [7]

Answer:

-0.75 linear

Step-by-step explanation:

7 0

3 years ago

Read 2 more answers

A beacon is flashing on top of a 50 foot tower. A 6 foot tall man walks constantly away from the tower at 5 feet/sec. At the ins

Viefleur [7K]

Answer: $\frac{253}{44}$

Step-by-step explanation:

ignore the "at the instant the man is 30 feet away" part, set it as X and the man's shadow as Y.

Similar triangles so we can do $\frac{50}{x+y} = \frac{6}{y}$ .

Solve for it we get 44y = 6x

Differentiate relative to time t, we get 44y' = 6x'.

change in x (x') is equal to 5. And we get the answer y' = $\frac{33}{44}$ .

the $\frac{33}{44}$ ft/sec is the rate of which the length of the shadow is changing. add 5 to it for the rate of the tip of his shadow moving away from the tower.

7 0

2 years ago

Plxxx help me i'm giving brainlyest

GenaCL600 [577]

Answer:

Words for dividing: