Oak Farms is an unlevered firm with 3055 shares outstanding and an EBIT of 650. Corporate...
Oak Farms is an unlevered firm with 3055 shares outstanding and an EBIT of 650. Corporate earnings are taxed at a rate of 32%. Calculate EPS for Oak Farms. $ Note: Your answer should be in dollars and cents. For example, $0.99. Suppose that Oak Farms makes a decision to partition (split) its assets into debt and equity. The firm issues $2150 of debt at a cost of 8.85%, and uses these funds to reduce the amount of equity on its books. The partition does not change the EBIT or the tax rate, but does reduce the number of shares outstanding to 2305. Compute Oak Farms EPS after the partition. $ Note: Your answer should be in dollars and cents. You Must Get Both Parts Correct to Receive Credit
Homework Answers
The solution to the given question is provided below for your reference
1.
=650*(1-32%)/3055=0.144680851
2.
=(650-2150*8.85%)*(1-32%)/2305=0.135623861
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Oak Farms is an unlevered firm with 3055 shares outstanding and
an EBIT of 650. Corporate...
Oak Farms is an unlevered firm with 3050 shares outstanding and an EBIT of 750. Corporate...
Oak Farms is an unlevered firm with 3050 shares outstanding and an EBIT of 750. Corporate earnings are taxed at a rate of 33%. Calculate EPS for Oak Farms. $ Note: Your answer should be in dollars and cents. For example, $0.99. Suppose that Oak Farms makes a decision to partition (split) its assets into debt and equity. The firm issues $1350 of debt at a cost of 7.85%, and uses these funds to reduce the amount of equity on...
Queen's Gate Inc. generates perpetual annual EBIT of $500. The cost of unlevered equity for Queen's Gate is 10%. The corporate tax rate is 35%. Queen's Gate has 300 shares outstanding that...
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Respecfully--Please answer all if you are willing to help. This is
over MM propositions anf optimal capital structure theories
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F) Total Debt to total capital ratio
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H) ROE
I) Profit margin
J) Return invested capital
K) Operating Margin
L) EPS
M) P/E ratio
N) Book value per share
O) Equity multiplier
DO NOT ROUND INTERMEDIATE CALCULATIONS
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5 percent. The firm is considering issuing another $2 million of
debt and using the proceeds of the debt issue to repurchase shares
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over MM propositions anf optimal capital structure theories
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E) TIE
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H) ROE
I) Profit margin
J) Return invested capital
K) Operating Margin
L) EPS
M) P/E ratio
N) Book value per share
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DO NOT ROUND INTERMEDIATE CALCULATIONS
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