Durbin,Inc

question 62

Multiple Choice

Durbin,Inc.,is an unlevered firm with a total market value of $460,000 and 40,000 shares of stock outstanding.The firm has expected EBIT of $48,000 if the economy is normal and $56,000 if the economy booms.The firm is considering a bond issue of $57,500 with an attached interest rate of 6.8 percent.The bond proceeds will be used to repurchase shares.Ignore taxes.What will be the earnings per share after the repurchase if the economy booms?

• A)$1.49
• B)$1.63
• C)$1.45
• D)$1.54
• E)$1.68

Understand the role of mutual agreement in modifying, discharging, or terminating contracts.

Comprehend the legal effects of conditions connected to contracts.

Know the legal remedies available for non-performance and breach of contract.

Understand the principles governing the termination of contractual duties by agreement or performance.

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Definitions:

Low Birthrate

A situation where a country or region experiences a lower number of births, often leading to concerns about population decline and demographic aging.

Aging Population

A demographic trend where the median age in a population increases over time due to increasing life expectancy and/or declining birth rates.

Entitlement Program

Government programs that provide guaranteed benefits to those who meet eligibility requirements, such as Social Security or Medicare.

Eligibility Requirements

Criteria that must be met in order to qualify for a particular position, activity, or benefit.