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Kyle Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, Kyle would have 765,000 shares of stock outstanding. Under Plan II, there would be 515,000 shares of stock outstanding and $9.25 million in debt outstanding. The interest rate on the debt is 12 percent, and there are no taxes. Requirement 1: Assume that EBIT is $2.6 million. Compute the EPS for both Plan I and Plan II. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32 EPS Plan I $ Plan II $ Requirement 2: Assume that EBIT is $3.1 million. Compute the EPS for both Plan I and Plan II. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) EPS Plan I $ Plan II $ Requirement 3: What is the break-even EBIT? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).) Break-even EBIT $
$1,200 is received at the beginning of year 1, $2,200 is received at the beginning of year 2, and $3,300 is received at the beginning of year 3. If these cash flows are deposited at 12 percent, their combined future value at the end of year 3 is ____..
Prepare a line graph showing the budgeted total revenues and total expenditures
Haunted Forest, Inc. is selling fog machines. Use the following information about Haunted Forest, Inc. to answer the following questions. Average selling price per unit $329. Variable cost per unit $203 Units sold 364 Fixed costs $16,717 Interest exp..
Donna would like to attend law school soon. After researching the cost of tuition, she determines that she will need to save $60,000 in 4 years. She decides that she will make weekly deposits into a savings account that earns 2 3/4% interests. How mu..
After six months of study, much political arm wrestling, and some serious financial analysis, Dr. Martin Starr, president of Southwestern University, had reached a decision. To the delight of its students, and to the disappointment of its athletic bo..
Why are capital gains excluded from the dividend discount model? Does the exclusion of capital gains limit its validity? How do money managers and investors address this issue?
Assessing the Use of Financial Data in Strategic Decision-Making - Post an explanation of the tools that you believe would help you to reach a decision - Post an explanation of the tools that you believe would help you to reach a decision.
Both Bond Sam and Bond Dave have 6 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has four years to maturity, whereas Bond Dave has 19 years to maturity. If interest rates suddenly rise by 2 percent, what is the perc..
Within a given distribution channel, the following information is available concerning trade margins and costs. A wholesaler has a unit selling price of $250 and a unit cost of $140. The retailer requires a 33% mark up on selling price. The manufactu..
Calculate the conversion value of the bonds if Bradford's common stock is selling for $35 per share. Calculate the straight-bond value, assuming that straight debt of equivalent risk and maturity is yielding 11 percent.
Compute the NPV statistic for Project Y if the appropriate cost of capital is 12 percent.
The nominal interest rate is 5%, compounded yearly. How much would you have to pay today in order to receive the string of payments 3,5,-6,5, where the it payment is to be received i years from now, i=1,2,3,4. (The payment -6 means that you will have..
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