Excel Solutions - Chapter 17

Excel Solutions - Chapter 17 - Chapter 17 Problems 1-21...

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Chapter 17 Problems 1-21 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green
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Chapter 17 Question 1 Input Area: Market value $150,000 EBIT $14,000 Debt issue $60,000 Interest rate 5% Shares outstanding 2,500 Expansion-EBIT 30% Recession-EBIT 60% Output Area: No debt EBIT $5,600 $14,000 $18,200 Interest $- $- $- NI $5,600 $14,000 $18,200 EPS $2.24 $5.60 $7.28 Change EPS% -60.00% 0.00% 30.00% With debt Share price = $60.00 Shares repurchased = 1,000.00 EBIT $5,600 $14,000 $18,200 Interest $3,000 ### $3,000 ### $3,000 NI $2,600 $11,000 $15,200 EPS $1.73 $7.33 $10.13 Change EPS% -76.36% 0.00% 38.18%
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Chapter 17 Question 2 Input Area: Market value $150,000 EBIT $14,000 Debt issue $60,000 Interest rate 5% Shares outstanding 2,500 Expansion-EBIT 30% Recession-EBIT 60% Tax rate 35% Output Area: No debt with taxes EBIT $5,600 $14,000 $18,200 Interest - - - Taxes 1,960 4,900 6,370 NI $3,640 $9,100 $11,830 EPS $1.46 $3.64 $4.73 Change EPS% -60.00% 0.00% 30.00% With debt and taxes Share price = $60.00 Shares repurchased = 1,000.00 EBIT $5,600 $14,000 $18,200 Interest 3,000 ### 3,000 ### 3,000 Taxes 910 3,850 5,320 NI $1,690 $7,150 $9,880 EPS $1.13 $4.77 $6.59 Change EPS% -76.36% 0.00% 38.18%
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Chapter 17 Question 3 Input Area: No debt TE = MV = $150,000 With debt TE = $90,000 Output Area: a. ROE 3.73% 9.33% 12.13% Change ROE% -60.00% 0.00% 30.00% b. ROE 2.89% 12.22% 16.89% Change ROE % -76.36% 0.00% 38.18% c. No debt No debt, ROE 2.43% 6.07% 7.89% Change ROE % -60.00% 0.00% 30.00% With debt With debt, ROE 1.88% 7.94% 10.98% Change ROE % -76.36% 0.00% 38.18%
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Chapter 17 Question 4 Input Area: Plan I: Shares outstanding 150,000 Plan II: Shares outstanding 60,000 Debt outstanding $1,500,000 Interest rate 10% a. EBIT $200,000 b. EBIT $700,000 Output Area: a. NI EPS Plan I $200,000 $1.33 Plan II $50,000 $0.83 b. Plan I $700,000 $4.67 Plan II $550,000 $9.17 c. Breakeven EBIT = $250,000.00
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Question 5 Input Area: Plan I: Shares outstanding 150,000 Plan II: Shares outstanding 60,000 Debt outstanding
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Excel Solutions - Chapter 17 - Chapter 17 Problems 1-21...

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