Calculate expected earnings per share

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Reference no: EM132546873

Wireless has the following assets:

Current assets: Temporary $1,170,000 Permanent 1,340,000 Capital assets 7,850,000 Total assets $10,360,000

Its operating profit (EBIT) is expected to be $2.7 million. Its tax rate is 30 percent. Shares are valued at $20. Capital structure is either short-term financing at 5 percent or equity. There is no long-term debt. (Round the final answers to 2 decimal places.)

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

EPS $

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

EPS $

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

EPS Hedged $ Capital structure $

Reference no: EM132546873

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