Franklin corporation is comparing two different capital structures, an all-equity plan (plan i) and a levered plan (plan ii). under plan i, the company would have 200,000 shares of stock outstanding. under plan ii, there would be 150,000 shares of stock outstanding and $2.2 million in debt outstanding. the interest rate on the debt is 5 percent and there are no taxes.
a. if ebit is $350,000, what is the eps for each plan? (do not round intermediate calculations and round your answers to 2 decimal places, e. g., 32.16.)
eps
plan i $
plan ii $
b. if ebit is $600,000, what is the eps for each plan? (do not round intermediate calculations and round your answers to 2 decimal places, e. g., 32.16.)
eps
plan i $
plan ii $
c. what is the break-even ebit? (enter your answer in dollars, not millions of dollars, e. g., 1,234,567. do not round intermediate calculations and round your answer to the nearest whole number, e. g., 32.)
break-even ebit $
Answers: 1
Other questions on the subject: Business
Business, 21.06.2019 21:30, Officaljazz18
Dr. dow jones wants to know whether a problem-based approach to teaching economics will result in higher academic performance than his traditional method. of the six sections of economics 101 at his university, dr. jones randomly assigns three sections to the traditional method and three sections to the problem-based method for unit 1 of the course. then all sections switch the instructional method for unit 2. he plans to compare the performance of the two groups of sections on their unit 1 and unit 2 exams. this study employs a design.
Answers: 3
Business, 21.06.2019 23:30, trinitieu66
Which alternative accounting method allows farmers to record expenses and incomes in the year in which they sell their yield? gaap allows for the method, which permits farmers to subtract the expenses of producing the crop in the year in which they sell the yield and earn the revenue.
Answers: 3
Business, 22.06.2019 08:30, aasiarobinson998
What is the key to success in integrating both lethal and nonlethal activities during planning? including stakeholders once a comprehensive operational approach has been determined knowing the commander's decision making processes and "touch points" including stakeholders from the very beginning of the design and planning process including the liaison officers (lnos) in all the decision points?
Answers: 1
Business, 22.06.2019 09:40, shybug886
Newton industries is considering a project and has developed the following estimates: unit sales = 4,800, price per unit = $67, variable cost per unit = $42, annual fixed costs = $11,900. the depreciation is $14,700 a year and the tax rate is 34 percent. what effect would an increase of $1 in the selling price have on the operating cash flow?
Answers: 2
Do you know the correct answer?
Franklin corporation is comparing two different capital structures, an all-equity plan (plan i) and...
Questions in other subjects:
Mathematics, 18.03.2021 01:30
Mathematics, 18.03.2021 01:30
World Languages, 18.03.2021 01:30
History, 18.03.2021 01:30
Mathematics, 18.03.2021 01:30
