Use the Following Information to Answer the Question(s)below

question 15

Multiple Choice

Use the following information to answer the question(s) below.
Nielson Motors is currently an all-equity financed firm.It expects to generate EBIT of $20 million over the next year.Currently Nielson has 8 million shares outstanding and its stock is trading at $20.00 per share.Nielson is considering changing its capital structure by borrowing $50 million at an interest rate of 8% and using the proceeds to repurchase shares.Assume perfect capital markets.
-Nielson's EPS if they choose not to change their capital structure is closest to:

• A)$2.00.
• B)$2.30.
• C)$2.50.
• D)$2.90.

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Definitions:

Environmental Shifts

Significant changes in environmental conditions, such as climate, ecosystems, or biodiversity, often resulting from natural processes or human activities.

Biodiversity

The range of different life forms, including plants, animals, fungi, and microorganisms, as well as the ecosystems they inhabit.

Human Activity

Actions or endeavors undertaken by humans, often influencing the environment or society.

Climate Change

Refers to significant changes in global temperatures and weather patterns over time.