What will their eps be under current structure

Assignment Help Financial Management

Reference no: EM131913401

The CFO of Metal Recycling Inc. has come up with the following projected figures for next year:

Sales 275,000

Costs 70% of sales

Depreciation 30,000

Tax rate 35%

Current Shares outstanding 11,000

Metal Recycling Inc has no debt currently, but the board is considering a loan of $300,000 at 11% interest, which they will use to repurchase shares of their own stock at $100 per share. The CFO thinks his projections of sales may be off by + or - 10%. Depreciation will stay the same. What will their EPS be under the current structure and under the proposed structure for each scenario? Is the restructuring a good idea?

Current Structure:

Worst Case ____________ Base Case_______________ Best Case _____________

Proposed Structure:

Worst Case ____________ Base Case_______________ Best Case _____________

Should they do the restructuring? __________________

Yes or no

Reference no: EM131913401

Questions Cloud

How can supplier certification contribute to quality product : How can supplier certification contribute to quality products or services? Should all suppliers be certified? Why or why not?

What is the required rate of return on stock : Dividends are expected to grow at 7% indefinitely and the most recent dividend was $1. What is the required rate of return on XYZ stock?

What are the costs of prevention and internal failure : Which of the four manufacturing quality dimensions are most likely to improve revenue? Which ones are related more to cost reduction or to both revenue.

According to purchasing power preservation model : Calculate the amount of capital Jordan will need at retirement according to the purchasing power preservation model.

What will their eps be under current structure : What will their EPS be under the current structure and under the proposed structure for each scenario?

Define barriers to successful quality implementation effort : Which of Deming's 14 points do you agree with and which ones do you disagree with? Compare the Baldrige-based approach to the use of ISO 9000.

What is the utilization rate of the service system : A small suburban post office is frequented by customers at the rate of 15 per hour. The post office has a single employee who typically processes each customer.

What type of control chart would you use : Put yourself in the role of a plant manager making bumpers for cars, a manager of a bakery and a hotel manager. What would need to measure and control.

What insights do visual illusions offer us : Visual illusions (also called optical illusions) show that the brain can be readily fooled. What insights do visual illusions offer us regarding the workings?

User Account

All Pages