Homework Answers
|
Part a Current asset |
1090000 |
| Permanent | 1180000 |
| Capital assets | 7450000 |
| Total assets | 9720000 |
| If all equity then number of shares outstanding = 9720000 / 20 | |
| If all equity then number of shares outstanding = 486000 | |
| EBIT | 1900000 |
| Less : Tax @ 30%' | 570000 |
| Net income | 1330000 |
| Shares outstanding | 486000 |
| EPS (Net income / Shares outstanding) | 2.74 |
| EPS = 2.74 | |
| Part b | |
| Current asset ( short term finance @5%) | 1090000 |
| Permanent | 1180000 |
| Capital assets | 7450000 |
| Total assets | 9720000 |
| If all equity then number of shares outstanding = (1180000+7450000) / 20 | |
| If all equity then number of shares outstanding = 431500 | |
| EBIT | 1900000 |
| Less : Interest expense (1090000*5%) | 54500 |
| Earning before taxes | 1845500 |
| Less : Tax @ 30%' | 553650 |
| Net income | 1346350 |
| Shares outstanding | 431500 |
| EPS (Net income / Shares outstanding) | 3.12 |
| EPS = 3.12 | |
| Part c | |
| Current asset ( short term finance @12%) | 1090000 |
| Permanent | 1180000 |
| Capital assets | 7450000 |
| Total assets | 9720000 |
| If all equity then number of shares outstanding = (1180000+7450000) / 20 | |
| If all equity then number of shares outstanding = 431500 | |
| EBIT | 1900000 |
| Less : Interest expense (1090000*12%) | 130800 |
| Earning before taxes | 1769200 |
| Less : Tax @ 30%' | 530760 |
| Net income | 1369240 |
| Shares outstanding | 431500 |
| EPS (Net income / Shares outstanding) | 3.17 |
| EPS = 3.17 | |
| EPS | |
| Hedged | 2.74 |
| Capital structure | 3.17 |
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