User Account

All Pages

Calculate the change in the firm eps

Assignment Help Finance Basics
Reference no: EM132397426

Consider a firm with an EBIT of $857,000. The firm finances its assets with $2,570,000 debt (costing 8.2 percent and is all tax deductible) and 470,000 shares of stock selling at $8.00 per share. To reduce the firm's risk associated with this financial leverage, the firm is considering reducing its debt by $1,000,000 by selling an additional 270,000 shares of stock. The firm's tax rate is 21 percent. The change in capital structure will have no effect on the operations of the firm. Thus, EBIT will remain at $857,000.

Calculate the change in the firm's EPS from this change in capital structure. (Do not round intermediate calculations and round your final answers to 2 decimal places.)

  • Before EPS
  • After EPS
  • Difference

Reference no: EM132397426

Questions Cloud

Educ 606 tests and measurements question : EDUC 606 Tests and Measurements assignment help and assessment help, Liberty University - Create a mastery measurement probe (not a curriculum based measurement
Bout budget estimation and developing budget : Describe the conditions for which parametric, analogous and bottom up estimation techniques work best, and provide 2 examples in support of each method.
How would you adapt the three-step writing process : When learning new content, it is important to ask yourself what you know and do not know about the content. Reflection allows you to ask these important.
Why you selected area of research and topics to investigate : Why you selected the area of research and topics to investigate. The research approach you believe has the greatest potential for achieving your goals.
Calculate the change in the firm eps : Calculate the change in the firm's EPS from this change in capital structure. (Do not round intermediate calculations and round your final answers to 2 decimal)
What is the cost to contractors based on cost : If the selling price for cabinets is $9,377, what is the cost to contractors based on cost?
Describe classifications in sports programs based on gender : Research the implications of equal protection for K-12 students within one of the following groups: Classifications in academic programs based on gender.
Understand the impact of inflation on interest rates : Understand the impact of inflation on interest rates. Real Cash Flows. You want to have $2.6 million in real dollars in an account when you retire in 40 years.
Compare practice management programs and electronic health : Technology has also become part of the daily life in the medical office. Compare Practice Management (PM) Programs and Electronic Health Records

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd