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
Related questions
Question
- Consider the following sensitivity analysis of EBIT and earnings per share (EPS) where $34,000 is the expected level of EBIT after the acquisition and $20,000 is the recession level of EBIT that might be anticipated. What other information can be interpreted from the chart below?
|
EBIT |
DEPS |
EEPS |
||||||
|
5,000 |
0.00 |
0.40 |
||||||
|
12,500 |
1.00 |
1.00 |
||||||
|
20,000 |
2.00 |
1.60 |
Recession Level EBIT (-22%) |
|||||
|
34,000 |
3.87 |
2.72 |
Expected EBIT |
|||||
|
|
Transcribed Image Text:Chart Title
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
5,000
10,000 15,000
20,000
25,000
30,000
35,000
40,000
DEPS
- EEPS
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