Leverage and capital structure

Assignment Help Financial Management

Reference no: EM13725252

EPS is the dollars and INVESTOR IS %'S they got jumbled

capital structure debt ratio: 0% ,10, 20, 30, 40, 50, 60

EARNINGS PER SHARE $6.24, 7.80, 9.60,10.88, 11.02, 10.00, 8.80

Investor required return rate 13%,15,16,17,19,20,22

a) Using the capitalized earnings method (EPS/RS), compute the estimated share values associated with each of the capital structures.

B) Select the optimal capital structure on the basis of:

a. Maximization of expected earnings per share.

b. Maximization of share value

c) Which capital structure do you recommend? And why?

Reference no: EM13725252

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