urbriggen Corporation is considering two financing alternatives. Under the first alternative, interest expense would be $280,000 and there would be 208,000 common shares outstanding. Under the second alternative, interest costs would be $200,000 and there would be 210,000 common shares outstanding. Zurbriggen has EBIT of $800,000 and pays income taxes at a 21% rate. What would Zurbriggen’s EPS be under the second financing alternative? A. $1.75. B. $2.26. C. $2.86. D. $3.81.
urbriggen Corporation is considering two financing alternatives. Under the first alternative, interest expense would be $280,000 and there would be 208,000 common shares outstanding. Under the second alternative, interest costs would be $200,000 and there would be 210,000 common shares outstanding. Zurbriggen has EBIT of $800,000 and pays income taxes at a 21% rate. What would Zurbriggen’s EPS be under the second financing alternative? A. $1.75. B. $2.26. C. $2.86. D. $3.81.
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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urbriggen Corporation is considering two financing alternatives. Under the first alternative, interest expense would be $280,000 and there would be 208,000 common shares outstanding. Under the second alternative, interest costs would be $200,000 and there would be 210,000 common shares outstanding. Zurbriggen has EBIT of $800,000 and pays income taxes at a 21% rate.
What would Zurbriggen’s EPS be under the second financing alternative?
| A. |
$1.75. |
|
| B. |
$2.26. |
|
| C. |
$2.86. |
|
| D. |
$3.81. |
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