eoc_chapter_13 - Chapter 13 Problems 1-19 Input boxes in...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 13 Problems 1-19 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 13 Question 1 Input Area: Market value $80,000 EBIT $10,000 Debt issue $40,000 Interest rate 5% Shares outstanding 4,000 Expansion-EBIT 20% Recession-EBIT 30% Output Area: No debt EBIT $7,000 $10,000 Interest $- $- NI $7,000 $10,000 EPS $1.75 $2.50 Change EPS% -30% 0% With debt Share price = $20.00 Shares repurchased = 2,000.00 EBIT $7,000 $10,000 Interest $2,000 ### $2,000 ### NI $5,000 $8,000 EPS $2.50 $4.00 Change EPS% -37.50% 0.00%
Background image of page 2
$12,000 $- $12,000 $3.00 20% $12,000 $2,000 $10,000 $5.00 25.00%
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 13 Question 2 Input Area: Market value $80,000 EBIT $10,000 Debt issue $40,000 Interest rate 5% Shares outstanding 4,000 Expansion-EBIT 20% Recession-EBIT 30% Tax rate 35% Output Area: No debt with taxes EBIT $7,000 $10,000 Interest $- $- Taxes $2,450 $3,500 NI $4,550 $6,500 EPS $1.14 $1.63 Change EPS% -30% 0% With debt and taxes Share price = $20.00 Shares repurchased = 2,000.00 EBIT $7,000 $10,000 Interest $2,000 ### $2,000 ### Taxes $1,750 $2,800 NI $3,250 $5,200 EPS 1.63 $2.60 Change EPS% -37.50% 0.00%
Background image of page 4
$12,000 $- $4,200 $7,800 $1.95 -20% $12,000 $2,000 $3,500 $6,500 $3.25 25.00%
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 13 Question 3 Input Area: No debt TE = MV = $80,000 With debt TE = $40,000 Output Area: a. ROE 0.0875 0.1250 Change ROE% -30.00% 0.00% b. ROE 0.1250 0.2000 Change ROE % -37.50% 0.00% c. No debt No debt, ROE 0.0569 0.0813 Change ROE % -30.00% 0.00% With debt With debt, ROE 0.0813 0.1300 Change ROE % -37.50% 0.00%
Background image of page 6
0.1500 20.00% 0.2500 25.00% 0.0975 20.00% 0.1625 25.00%
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Chapter 13 Question 4 Input Area: Plan I: Shares outstanding 600,000 Plan II: Shares outstanding 300,000 Debt outstanding $10,000,000 Interest rate 10% a. EBIT $1,500,000 b. EBIT $11,000,000 Output Area: a. NI EPS Plan I $1,500,000 $2.50
Background image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 26

eoc_chapter_13 - Chapter 13 Problems 1-19 Input boxes in...

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online