How will the results of the lawsuit affect dan inc

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Reference no: EM133326529

Dan Inc is being sued by Crusty Corp. Crusty is suing for $10M in damages and $500,000 in legal fees.

Assume Dan Inc has the following outcomes:

i. A 55% chance of not being sued

ii. A 10% chance having to pay all the costs and damages

iii. A 35% change of having to pay half the of the damages and costs

Question:

1. Estimate the loss.

2. How will the results of the lawsuit affect Dan Inc's EPS and debt-to-equity ratios calculations?

Use IFRS as a framework.

Reference no: EM133326529

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