Use the Information for the Question(s)below

question 74

Multiple Choice

Use the information for the question(s) below.
Assume that Rose Corporation's (RC) EBIT is not expected to grow in the future and that all earnings are paid out as dividends.RC is currently an all-equity firm.It expects to generate earnings before interest and taxes (EBIT) of $6 million over the next year.Currently RC has 5 million shares outstanding and its stock is trading for a price of $12.00 per share.RC is considering borrowing $12 million at a rate of 6% and using the proceeds to repurchase shares at the current price of $12.00.
-Following the borrowing of $12 million and subsequent share repurchase,the expected earnings per share for RC is closest to:

• A)$1.32.
• B)$1.44.
• C)$1.40.
• D)$1.20.

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Definitions:

Homosexuality

A sexual orientation characterized by a romantic or sexual attraction to individuals of the same sex.

Responsible Non-monogamy

A consensual relationship structure where parties agree to engage in multiple romantic or sexual relationships, with an emphasis on honesty and communication.

Monogamy

A relationship or marriage practice where an individual has only one partner at a time.

Authentic Bisexuality

A genuine attraction to both males and females, dismissing the notion that bisexuality is simply a phase or invalid.