Gray has a current capital structure consistingof $400,000 of 12% annual interest debt and 50,000 shares of common stock.The firm’s tax rate is 40% on ordinaryincome.If the EBIT is expected to...

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Gray has a current capital structure consisting of $400,000 of 12% annual interest debt and 50,000 shares of common stock.The firm’s tax rate is 40% on ordinary income.If the EBIT is expected to be $200,000, what is the firm’s earnings per share?

Answered Same DayDec 21, 2021

Answer To: Gray has a current capital structure consistingof $400,000 of 12% annual interest debt and 50,000...

Robert answered on Dec 21 2021
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Gray has a current capital structure consisting of $400,000 of 12% annual interest debt
and 50,000 shares of common stock. The firm’s tax rate is 40% on ordinary income. If the
EBIT is expected to be $200,000, what is the firm’s earnings per share ?
EBIT………………………………………………………..$200,000
Less:...
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