Calculate expected earnings per share

Assignment Help Finance Basics
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

Questions Cloud

Increased market size and economies of scale : When used effectively, international strategies provide the following three basic benefits: increased market size, economies of scale, and location advantages.
Exchange rate forecasting : Identify advantages and disadvantages of international investing.
Qualities of effective ethical strategic leader : Write a paper about qualities of effective ethical strategic leader. Strategic leadership includes the ability to anticipate events, envision possibilities
Population cultural considerations-genetic predispositions : Practicum Discussion- Are there any cultural considerations that might inform your approach to caring for this population?
Calculate expected earnings per share : Calculate expected earnings per share (EPS) if the firm is perfectly hedged.
Explain why net operating working capital is : The purchasing costs today and maintenance expenses at the end of every year for these two machines are given as follows:
Domain of option trading strategies : Illustrate the strategy called "long butterfly spread on call options" within the domain of option trading strategies.
Category of riba does transaction fall : Under which category of Riba does this transaction fall? Justify your answer.
Compute the value of pet food company bonds : Compute the value of Pet Food Company bonds if the market interest rate on this type of bond is 8.37 percent.

Reviews

Write a Review

Finance Basics Questions & Answers

  Find what is the current dollar price

Harrison Co. issued 16-year bonds one year ago at a coupon rate of 6.2 percent. The bonds make semiannual payments. If the YTM on these bonds is 5.4 percent.

  What is the target stock price in one year

At the same time, the income statement shows net income of $780,000. The company paid dividends of $397,800 and has 120,000 shares of stock outstanding. If the benchmark PE ratio is 29, what is the target stock price in one year?

  Design your professional presence assignment

?In this project, you will create a professional presence on LinkedIn (a professional social media network that is widely used by professionals and employers

  What is the project npv-quad enterprises

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.29 million.

  Which firm is more likely to benefit from economies of scale

King Company has decided to establish distributorship subsidiaries in various countries, while President Inc. has decided to establish manufacturing in various countries. Which firm is more likely to benefit from economies of scale?

  Which stock has the most systematic risk

The market risk premium is 8 percent, and the risk-free rate is 5 percent. Which stock has the most systematic risk? Which one has the most unsystematic risk? Which stock is "riskier"?Explain.

  How given conditions will affect the value of the krank

Because your firm exports goods to Country K, your job as an international cash manager requires you to forecast the value of Country K's currency.

  What is its weighted average cost of capital

If its equity cost of capital is 12%, and its debt cost of capital is 10%, and its effective corporate tax rate is 40%, what is its weighted average cost of cap

  What is the firm cost of goods sold

Ellicott City Manufacturers, Inc. has sales of $6,344,210, and a gross profit margin of 67.3 percent. What is the firm's cost of goods sold?

  Secondary market after receiving the first coupon

What is the return on the investment if interest rate increases to R=25% ? What is the return on the investment if interest rate decreases to R=15%?

  What will be the price of the treasury bill

FIN 351- Assume a $1,000 treasury bill is quoted to pay 7% interest over a three-month period. What will be the price of the treasury bill?

  Review the key problems

I have just been hired through the new president of Playword Greeting Cards, an established company that sells greeting cards and collectibles to its own line of company-owned and franchise stores.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd