Consider two firms that are identical in every way except that one has $15,000 of debt and 500 shares of stock outstanding,while the other is all-equity and has 650 shares of stock outstanding.Assume that the debt is a perpetuity with annual coupons at the rate of 6%.What is each firms' earnings per share if EBIT is $7,500? Assume a tax rate of 40%.
Definitions:
Brain
The organ located in the skull of vertebrates that is the center of the nervous system, responsible for perception, cognition, attention, emotion, and action.
Superego
The superego is a component of the mind in psychoanalytic theory, acting as the ethical or moral self, which judges the actions performed by the ego against internalized societal and parental standards.
Compromise
A method of resolving disagreements where each party gives up something that it wants in order to reach an agreement.
Unconsciously Believes
Refers to beliefs that individuals hold without being aware of them, which can influence thoughts, feelings, and behaviors beyond conscious awareness.
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