Ski and Board are two identical firms of identical size operating in identical markets. Ski is unlevered with assets valued at $13000 and has 650 shares of stock outstanding Board also has $13000 in assets and has $4000 in debt financed at an interest rate of 9.00% and has 450 shares of stock outstanding Both Ski and Board pay tax at the rate of 30%. Calculate the level of EBIT that would make earnings per share the same for Ski and Board $ _______ Place your answer to the nearest dollar. If applicable, your answer should NOT include a comma.
Ski and Board are two identical firms of identical size operating in identical markets. Ski is unlevered with assets valued at $13000 and has 650 shares of stock outstanding Board also has $13000 in assets and has $4000 in debt financed at an interest rate of 9.00% and has 450 shares of stock outstanding Both Ski and Board pay tax at the rate of 30%. Calculate the level of EBIT that would make earnings per share the same for Ski and Board $ _______ Place your answer to the nearest dollar. If applicable, your answer should NOT include a comma.
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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Ski and Board are two identical firms of identical size operating in identical markets. Ski is unlevered with assets valued at $13000 and has 650 shares of stock outstanding Board also has $13000 in assets and has $4000 in debt financed at an interest rate of 9.00% and has 450 shares of stock outstanding Both Ski and Board pay tax at the rate of 30%.
Calculate the level of EBIT that would make earnings per share the same for Ski and Board $ _______ Place your answer to the nearest dollar. If applicable, your answer should NOT include a comma.
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