Simone's sweets is an all-equity firm that has 6700 shares of stock outstanding at a market price of $18 per share. The firm's management has decided to issue $56000 worth of debt at an interest rate of 6 percent. The funds will be used to repurchase shares of the outstanding stock. What are the earnings per share at the break--even EBIT?
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Simone's sweets is an all-equity firm that has 6700 shares of stock outstanding at a market price of $18 per share. The firm's management has decided to issue $56000 worth of debt at an interest rate of 6 percent. The funds will be used to repurchase shares of the outstanding stock. What are the earnings per share at the break--even EBIT?
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- Simone's Sweets is an all-equity firm that has 9,100 shares of stock outstanding at a market price of $27 per share. The firm's management has decided to issue $88,000 worth of debt at an interest rate of 6 percent. The funds will be used to repurchase shares of the outstanding stock. What are the earnings per share at the break-even EBIT?Paradise Travels is an all-equity firm that has 9,000 shares of stock outstanding at a market price of $27 a share. Management has decided to issue $25,000 worth of debt and use the funds to repurchase shares of the outstanding stock. The interest rate on the debt will be 7.3 percent. What are the earnings per share at the break-even level of earnings before interest and taxes? Ignore taxes.Hotel Cortez is an all-equity firm that has 11,200 shares of stock outstanding at a market price of $35 per share. The firm's management has decided to issue $68,000 worth of debt and use the funds to repurchase shares of the outstanding stock. The interest rate on the debt will be 9 percent. What is the break-even EBIT?
- Holly's is currently an all equity firm that has 9,000 shares of stock outstanding at a market price of $45 a share. The firm has decided to leverage its operations by issuing $120,000 of debt at an interest rate of 9.5 percent. This new debt will be used to repurchase shares of the outstanding stock. The restructuring is expected to increase the earnings per share. What is the minimum level of earnings before interest and taxes that the firm is expecting? Ignore taxes. $38,475 $40,516 $42,000 $44,141Texas Instruments is an all-equity company and currently has 9,400 shares of common stock. Each share can be bought or sold for $26 in today's market. Texas Instruments is considering borrowing $ 92,000 by selling corporate bonds, and using the raised money to buy back a part of its outstanding shares of stock from the market. The yield to maturity (or the annual rate of return) for these bonds is 7 % . Calculate Texas Instruments' earnings per share at the break- even level of the company's EBIT, such that Texas Instruments' stockholders are neutral to Texas Instruments being financially levered or unlevered. Multiple Choice $3.16 $2.92 $1.82 $2.18 $4.83Big Industries has the following market-value balance sheet. The stock currently sells for $20 a share, and there are 1,300 shares outstanding. The firm will either pay a $1 per share dividend or repurchase $1,300 worth of stock. Ignore taxes. Assets Liabilities and Equity Cash $ 8,000 Debt $ 11,500 Fixed assets 29,500 Equity 26,000 a. What will be the subsequent price per share if the firm pays a dividend? b. What will be the subsequent price per share if the firm repurchases stock? (Round your answer to the nearest dollar.) c. If total earnings of the firm are $32,300 a year, find earnings per share if the firm pays a dividend. (Do not round intermediate calculations. Round your answer to 3 decimal places.) d. If total earnings of the firm are $32,300 a year, now find earnings per share if the firm repurchases stock. (Do not round intermediate calculations. Round your answer to 3 decimal places.) e. If total earnings of the firm are $32,300 a year,…
- Texas Instruments is an all-equity company and currently has 6,700 shares of common stock. Each share can be bought or sold for $18 in today's market. Texas Instruments is considering borrowing $56,000 by selling corporate bonds, and using the raised money to buy back a part of its outstanding shares of stock from the market. The yield to maturity (or the annual rate of return) for these bonds is 6 %. Calculate Texas Instruments' earnings per share at the break-even level of the company's EBIT, such that Texas Instruments' stockholders are neutral to Texas Instruments being financially levered or unlevered. Multiple Choice O O O O $2.02 $2.18 $1.08 $1.30 $2.33n Tina Black's Fabrics is currently an all equity firm that has 15,000 shares of stock outstanding at a market price of $12.50 a share. Company management has decided to issue $60,000 worth of debt and use the funds to repurchase shares of the outstanding stock at the market price. The interest rate on the debt will be 7%. Ignoring taxes, what is the earnings per share (EPS) at the break-even level of earnings before interest and taxes (EBIT)? O A. O B. O D. $1.143 O C. $1.500 SOE. $1.125 $0.875 $0.667 27/Big Industries has the following market-value balance sheet. The stock currently sells for $20 a share, and there are 1,300 shares outstanding. The firm will either pay a $1 per share dividend or repurchase $1,300 worth of stock. Ignore taxes. Assets Liabilities and Equity Cash $ 8,000 Debt $ 11,500 Fixed assets 29,500 Equity 26,000 a. What will be the subsequent price per share if the firm pays a dividend? b. What will be the subsequent price per share if the firm repurchases stock? (Round your answer to the nearest dollar.) c. If total earnings of the firm are $32,300 a year, find earnings per share if the firm pays a dividend. (Do not round intermediate calculations. Round your answer to 3 decimal places.) d. If total earnings of the firm are $32,300 a year, now find earnings per share if the firm repurchases stock. (Do not round intermediate calculations. Round your answer to 3 decimal places.) e. If total earnings of the firm are $32,300 a year,…
- Random Tools is currently an all-equity firm that has 7,200 shares of stock outstanding at a narket price of $41 per share. The firm has decided to leverage its operations by issuing $60,000 of debt at an interest rate of 7.6 percent. This new debt will be used to repurchase shares of the outstanding stock. The restructuring is expected to increase the earnings per share. What is the minimum level of earnings before interest and taxes that the firm is expecting? Ignore taxes.Big Industries has the following market-value balance sheet. The stock currently sells for $20 a share, and there are 1,260 shares outstanding. The firm will either pay a $1 per share dividend or repurchase $1,260 worth of stock. Ignore taxes. Liabilities and Assets Equity $ 7,200 Fixed assets 29,300 Debt $11,300 25,200 Cash Equity a. What will be the subsequent price per share if the firm pays a dividend? b. What will be the subsequent price per share if the firm repurchases stock? (Round your answer to the nearest dollar.) c. If total earnings of the firm are $25,500 a year, find earnings per share if the firm pays a dividend. (Do not round intermediate calculations. Round your answer to 3 decimal places.) d. If total earnings of the firm are $25,500 a year, now find earnings per share if the firm repurchases stock. (Do not round intermediate calculations. Round your answer to 3 decimal places.) e. If total earnings of the firm are $25,500 a year, find the price-earnings ratio if the…Bob’s Standard Station has 15,000 shares of stock outstanding at a market price of $15 a share. The current earnings per share are $1.26. The firm has total assets of $312,000 and total liabilities of $97,500. Next week, the firm will be repurchasing $37,500 worth of stock. Ignore taxes. What will be the earnings per share after the stock repurchase?