Wealth and Health Company Is Financed Entirely by Common Stock

question 48

Multiple Choice

Wealth and Health Company is financed entirely by common stock that is priced to offer a 15 percent expected return.The common stock price is $40/share.The earnings per share (EPS) is expected to be $6.If the company repurchases 25 percent of the common stock and substitutes an equal value of debt yielding 6 percent, what is the expected value of earnings per share after refinancing? (Ignore taxes.)

• A)$6
• B)$7.52
• C)$7.20
• D)$6.90

Learn the legal requirements and procedural aspects of forming a corporation.

Understand the liability of individuals acting on behalf of a corporation.

Recognize the implications of corporate personhood on rights and responsibilities.

Understand the concept of a corporation’s implied powers.

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Definitions:

Pharynx

A region of the throat situated behind the mouth and nasal cavity, crucial for the passage of air to the lungs and food to the esophagus.

Protective Function

Refers to mechanisms or actions within a system, organism, or structure that serve to guard or defend against damage, disease, or any form of harm.

Respiratory System

The respiratory system is the complex of organs and structures involved in breathing, including the lungs, airways, and muscles, facilitating the exchange of oxygen and carbon dioxide.

ACE

An enzyme, Angiotensin-Converting Enzyme, involved in the renin-angiotensin system which regulates blood pressure.