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Anticipated earnings per share

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Hazelton Bakers is an all-equity firm with a total market value of$650,000. The firm has 130,000 shares of stock outstanding. Management is considering issuing $250,000 of debt at an interest rate of 8 percent and using the proceeds to repurchase shares. The projected earnings before interest and taxes are $60,000. What are the anticipated earnings per share if the debt is issued? Ignore taxes.

Reference no: EM131074046

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