There Are No Taxes

question 102

Multiple Choice

There are no taxes. EBIT is expected to be $2.5 million, but could be as high as $3.5 million if an economic expansion occurs, or as low as $2 million if a recession occurs. All values are market
Values.
What is EPS under the current capital structure if there is a recession?

• A) $3.33
• B) $4.17
• C) $5.00
• D) $6.25

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