Find the tax rate for year 2011

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Problem: Global Corp had a total sale of $186.7 million in year 2011. In 2012 Global is assuming an aggressive marketing campaign and sales are projected to be 15% higher. However, the operating margin will fall from 5.57% to 4.5%. Suppose Global has no other income and interest expenses remain unchanged from year 2011 interest of $7.7 mil. Tax rate is the same as in year 2011 (tax paid in 2011 was $0.7 mil).

Required:

Question 1: Find EBIT 2011 (Hint: Revenue* operating. margin)

Question 2: Find the tax rate for year 2011 (Hint: find tax paid/ (EBIT2011 - interest) *100%)

Question 3: Find EBIT for year 2012.

Question 4: Find net income for year 2012.

Question 5: If there are 3.6 mil outstanding share, what is EPS for 2012?

Question 6: Global has allocated 200,000 stock options to its executives. What are the diluted earnings per share?

Reference no: EM132438388

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