Calculate bear earnings per share

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Reference no: EM131101072

Expected net income after tax next year before new financing : $60,000,000

Sinking Fund payments due next year on existing debt: $20,000,000

Interest due next year on existing debt $18,000,000

Conpany Tax rate 25%

Common Stock Price, per share $17

Common Shares outstanding: 22,000,000

Calculate Bear's Earnings Per Share for next year assuming the firm raises $60 Million of new debt at an interest rate of 9 percent

a. $2.54

b. $22.54

c. $1.69

d. $16.95

Reference no: EM131101072

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