Reference no: EM131081521
Rise Against Corporation is comparing two different capital structures: an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 200,000 shares of stock outstanding. Under Plan II, there would be 150,000 shares of stock outstanding and $2.20 million in debt outstanding. The interest rate on the debt is 5 percent, and there are no taxes.
1. If EBIT is $350,000, what is the EPS for each plan? (Round your answers to 2 decimal places.(e.g., 32.16))
2. If EBIT is $600,000, what is the EPS for each plan? (Round your answers to 2 decimal places.(e.g., 32.16))
3. What is the break-even EBIT? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.)
|
Change in nonverbal or verbal actions for the clients
: Did certain questions or comments create a change in nonverbal or verbal actions for the clients - What open- and closed-ended questions did the counselor use?
|
|
Systems engineering and analysis
: A used automobile can be purchased by a student to provide transportation to and from university for $12,000 as-is (i.e. without warranty). First year maintenance cost is expected to be $1,200 and the maintenance costs will increase by $120 per year ..
|
|
Determine the convergence or divergence of given series
: Math 104: Homework 4. Determine the convergence or divergence of each of the following series defined for n ∈ N: ∑nn3/2n, and ∑n√(n + 1) - √n
|
|
Calculate the payback period for the project
: The Drillago Company is involved in searching for locations in which to drill for oil. The firm's current project requires an initial investment of $15 million and has an estimated life of 10 years. The expected future cash inflows for the project ar..
|
|
What is the break-even EBIT
: Rise Against Corporation is comparing two different capital structures: an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 200,000 shares of stock outstanding. Under Plan II, there would be 150,000 shares o..
|
|
What will be the swap rate on agreement to exchange currency
: Suppose the U.S. yield curve is flat at 5% and the euro yield curve is flat at 4%. The current exchange rate is $1.25 per euro. What will be the swap rate on an agreement to exchange currency over a 3-year period? The swap will call for the exchange ..
|
|
Invest them in shortterm safe financial instruments
: Money market mutual funds take in your dollars (like deposits) and invest them in shortterm “safe” financial instruments to earn you interest. Now assume there is a rule stating that MMMF’s could cash people out at $1 if (for instance) the value of t..
|
|
What is the book value per share of common stock
: A corporation has total assets of $85 million and total liabilities of $5 million. If the corporation has 4 million shares of common stock outstanding, what is the book value per share of common stock?
|
|
What will the cash flows for this project be
: Your company is contemplating replacing their current fleet of delivery vehicles with Nissan NV vans. You will be replacing 5 fully-depreciated vans, which you think you can sell for $3,000 apiece and which you could probably use for another 2 years ..
|