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:

Piaget's Processes

The cognitive developmental stages defined by Jean Piaget that detail how children's thinking evolves with age, including sensorimotor, preoperational, concrete operational, and formal operational stages.

Assimilation

The cognitive process by which new information is interpreted or transformed to fit into existing knowledge or schemas.

Substitution

Substitution in behavior refers to the process of replacing one activity or stimulus with another, often seen in coping strategies.

Cognitive Development

The development of cognitive processes such as memory, problem-solving abilities, and making decisions, starting in childhood and progressing through teenage years into adult life.