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Calculate next year earnings per share

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Reference no: EM133114570

Problem:

Nile Holdings

Selected financial information as of Dec. 31, 2017

Last year's EBIT (2017)

$175.0 million

Expected EBIT (2018)

$189.8 million

Current portion of existing long-term debt, due 2015

$34 million

Interest due in 2015 on existing debt

$36 million

Tax rate

35%

Common stock price per share

$50.00

Common shares outstanding

20 million

Dividends per share

$2.00

Please refer to the financial information for Nile Holdings above. Nile must decide how to finance a $100 million investment. Calculate next year's earnings per share assuming Nile raises $100 million of new debt at an interest rate of 7%.

Reference no: EM133114570

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