Multiple Choice
A firm has a current capital structure consisting of $400,000 of 6 percent annual interest debt and 50,000 shares of common stock.The firm's tax rate is 21 percent on ordinary income.If the EBIT is expected to be $200,000,two EBIT-EPS coordinates for the firm's existing capital structure are ________.
A) ($24,000,$0) and ($200,000,$0.74)
B) ($24,000,$0) and ($200,000,$2.78)
C) ($0,$24,000) and ($200,000,$1.82)
D) ($24,000,$0) and ($200,000,$3.52)
Correct Answer:
Verified
Correct Answer:
Verified
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