A Firm Has a Current Capital Structure Consisting of $400,000

question 81

Multiple Choice

A firm has a current capital structure consisting of $400,000 of 12 percent annual interest debt and 50,000 shares of common stock. The firm's tax rate is 40 percent on ordinary income. If the EBIT is expected to be $200,000, two EBIT-EPS coordinates for the firm's existing capital structure are ________.

• A) ($36,000, $0) and ($200,000, $3.04)
• B) ($48,000, $0) and ($200,000, $1.82)
• C) ($0, $48,000) and ($200,000, $1.82)
• D) ($152,000, $3.50) and ($150,000, $1.82)

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Definitions:

Structuralism

An early school of psychology that used introspection to explore the structure of the human mind.

Psychoanalysis

A therapeutic approach and theory of personality developed by Sigmund Freud, focusing on unconscious motivations and conflicts underlying human behavior.

Wundt

Often referred to as the father of experimental psychology, Wilhelm Wundt established the first psychology laboratory at the University of Leipzig, Germany.

Freud

Sigmund Freud, originating from Austria and specializing in neurology, pioneered psychoanalysis, which is a therapeutic procedure for mental health issues conducted through dialogue between psychoanalysts and their patients.