Jasper Industrial Has No Debt Outstanding and a Total Market

question 46

Multiple Choice

Jasper Industrial has no debt outstanding and a total market value of $216,000.Earnings before interest and taxes, EBIT, are projected to be $15,000 if economic conditions are normal.If there is strong expansion in the economy, then EBIT will be 12 percent higher.If there is a recession, then EBIT will be 15 percent lower.There are currently 8,600 shares outstanding.Ignore taxes.What is the percentage change in EPS when a normal economy slips into recession?

• A)-15.5 percent
• B)-15.2 percent
• C)-15.0 percent
• D)-16.1 percent
• E)-14.8 percent

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Definitions:

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