Requirement 8. The Lexington Company wants to expand and is considering options forraising additional cash. The company estimates net income before the expansion of $ 240comma 000 in 2025 and that the expansion will provide additional operating income of $ 70comma 000 in 2025. The company intends to sell the shares of treasury stock, so use issuedshares for the analysis rather than current shares outstanding. Compare these options,assuming a 40% income tax rate: Plan 1: Issue 5 comma 000 additional shares of commonstock for $ 48 per share. Plan 2: Issue $ 180 comma 000 in 10-year, 8% bonds payable. Whichoption will contribute more net income in 2025? Which option provides the highest EPS? First, complete the table below. (Complete all answer boxes. Enter a "0" for any zero amounts.Round the earnings per share amounts to the nearest cent.) Plan 1 Plan 2 Net income beforenew project 240,000 240, 000 Expected income on the new project 70, 000 70, 000 beforeinterest and income tax expenses Less: Interest expense 0 14, 400 Project income beforeincome tax 70,000 55, 600 Less: Income tax expense 28,000 22, 240 Project net income42,000 33, 360 Net income with new project 282, 000 273, 360 Earnings per share with newproject: 0.033... i really need help with this problem. can someone help me please. I havebeen working on this problem all day without any luck. So can someone help me please asap.

Net income:It is the income earned by an entity after incurring all the expenses. It is the net…

Answered: Requirement 8. The Lexington Company…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. Suppose Mydeco repurchases 1.9 million shares each year from 2016 to 2019. What would be its earnings per share in 2019? (Assume Mydeco pays for the shares using its available cash and that Mydeco earns no interest on its cash balances.)
A firm has a market value equal to its book value. Currently, the firm has excess cash of $500 and other assets of $8,000. Equity is worth $8,500. The firm has 850 shares of stock outstanding and net income of $1,200. What will the new earnings per share be if the firm uses its excess cash to complete a stock repurchase?
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Hewlard Pocket's market value balance sheet is given. Assets Liabilities and Shareholders' Equity A. Original balance sheet Cash Debt 150,000 950,000 Equity $1,100,000 Other assets 1,100,000 Value of firm Value of firm $1,100,000 Shares outstanding = 100,000 Price per share = $1,100,000 / 100,000 = $1 Pocket needs to hold on to $52,000 of cash for a future investment. Nevertheless, it decides to pay a cash dividend of $2.10 per share and to replace cash as needed with a new issue of shares. After the dividend is paid and the new stock is issued: a. What will be the price per share? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What will be the total value of the company? (Enter your answers in whole dollars, not in millions.) c. What will be the total value of the stock held by new investors? (Enter your answers in whole dollars, not in millions. Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) d. What…

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