Earnings per share be after the repurchase if economy booms

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Guinness Lab inc is an unlevered firm with a total market value of $172,500.00 with 5,250 shares of stock outstanding. The firm has expected to EBIT of $4,250.00 if the economy is normal and $7,500 if the economy booms. The firm is considering a $61,500.00 bond issue with attached interest rate of 5.75%. The bond proceeds will be used to repurchase shares. Ignore the the taxes. What will the earnings per share be after the repurchase if the economy booms?

Reference no: EM131933853

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