What are the anticipated earnings per share

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Reference no: EM13261427

Cross Town Cookies is an all-equity firm with a total market value of $720,000. The firm has 150,000 shares of stock outstanding. Management is considering issuing $200,000 of debt at an interest rate of 7 percent and using the proceeds to repurchase shares. The projected earnings before interest and taxes are $58,600. What are the anticipated earnings per share if the debt is issued? Ignor taxes.

A. $0.25
B. $0.33
C. $0.38
D. $0.41
E. $0.47

Reference no: EM13261427

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