Zambezi Corp. expects EBIT to vary with the state of the economy as follows: State of economy EBIT (in $ million) Boom 560 Base 125 Bust -200 Zambezi doesn't have any long-term debt and has 89 million shares outstanding, currently trading at $8.73. Because of political connections, it doesn't pay any taxes. What are the expected earnings per share (EPS) during a boom? What are the expected earnings per share (EPS) during a bust? Zambezi now issues bonds worth $41 million to buy back some shares. How many shares are outstanding after the restructuring (in million)? The interest rate on the debt is 4%. What are the expected earnings per share (EPS) during a boom after the restructuring? What are the expected earnings per share (EPS) during a bust after the restructuring?
Zambezi Corp. expects EBIT to vary with the state of the economy as follows:
| State of economy | EBIT (in $ million) |
| Boom | 560 |
| Base | 125 |
| Bust | -200 |
Zambezi doesn't have any long-term debt and has 89 million shares outstanding, currently trading at $8.73. Because of political connections, it doesn't pay any taxes.
What are the expected earnings per share (EPS) during a boom?
What are the expected earnings per share (EPS) during a bust?
Zambezi now issues bonds worth $41 million to buy back some shares. How many shares are outstanding after the restructuring (in million)?
The interest rate on the debt is 4%. What are the expected earnings per share (EPS) during a boom after the restructuring?
What are the expected earnings per share (EPS) during a bust after the restructuring?
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