Determining the eps of the firm

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MicroLink is a non-profit organization. Currently, the company has no debt and there are 4,000,000 common shares outstanding. The current share price is $2.50, The firm's senior management is proposing capital restructuring to borrow $3,000,000 and use the proceeds to repurchase equity. The cost of debt is 8%. Assume there are no corporate taxes.

If the current level of EBIT is $1,000,000 what will be the EPS of the firm if the proposal is implemented?

Reference no: EM132499613

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