Calculate expected earnings per share

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Reference no: EM131336174

Date Wireless has the following assets

Current Assets: Temporary $1, 110, 000

Permanent 1, 220, 000

Capital Assets 7, 550, 000

Total Assets $9,880, 000

Its operating profit (EBIT) is expected to be $2.1 million. Its tax rate is 30 percent. Shares are valued $20.00. Capital structure is either short-term financing at 5 percent of equity. There is no long-term debt (Round the final answer to 2 decimal places)

a. Calculate expected earnings per share (EPS) if the firm is perfectly hedged

Please provide detail how the debt is derived; It was unclear in another question; I was lost when looking at a similar questions which listed “a. in a perfectly hedged market both debt and equity are equal 3500000” however I was unsure of where the 350000 came from –the question was about Warp Tense Ltd within Expert Q &A

b. Calculate expected EPS it has a capital structure of 30% debts

c. Recalculate a and b if short term rates go to 12 percent.

Reference no: EM131336174

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