An analyst gathered the following data about a company for the coming year: Sales are estimated to be $3,000,000. The company's tax rate will be 30%. Interest expense will be $150,000. The company has 180,000 common shares outstanding. The estimated depreciation expense will be $200,000. Earnings before interest, taxes, depreciation, and amortization (EBITDA) profit margin is estimated to be 20%. The analyst's estimate of the company's earnings per share (EPS) would be: A. $0.42. B. $0.97. C. $1.98. D. $4.63.
An analyst gathered the following data about a company for the coming year: Sales are estimated to be $3,000,000. The company's tax rate will be 30%. Interest expense will be $150,000. The company has 180,000 common shares outstanding. The estimated depreciation expense will be $200,000. Earnings before interest, taxes, depreciation, and amortization (EBITDA) profit margin is estimated to be 20%. The analyst's estimate of the company's earnings per share (EPS) would be: A. $0.42. B. $0.97. C. $1.98. D. $4.63.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:An analyst gathered the following data about a company for the coming year:
Sales are estimated to be $3,000,000.
The company's tax rate will be 30%.
Interest expense will be $150,000.
The company has 180,000 common shares outstanding.
The estimated depreciation expense will be $200,000.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) profit margin is estimated
to be 20%.
The analyst's estimate of the company's earnings per share (EPS) would be:
A. $0.42.
B. $0.97.
C. $1.98.
D. $4.63.
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