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

question 29

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 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 Factors

Environmental Factors encompass all the external conditions and influences affecting the life and development of an organism, including social, cultural, and physical conditions.

Psychological Disorder

A syndrome characterized by clinically significant disturbance in an individual's cognition, emotion regulation, or behavior that reflects a dysfunction in the psychological, biological, or developmental processes underlying mental functioning.

Identical Twins

Siblings born from the same pregnancy, sharing 100% of their genetic makeup due to the splitting of a single fertilized egg.

Environmental Factors

Elements in the external surroundings that can influence an individual's mental and physical health.