A firm is currently an all equity firm with a total market value of $11,500,000 with 1,200,000 shares of stock outstandi

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answerhappygod
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A firm is currently an all equity firm with a total market value of $11,500,000 with 1,200,000 shares of stock outstandi

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A firm is currently an all equity firm with a total market value
of $11,500,000 with 1,200,000 shares of stock outstanding. The firm
has expected EBIT of $1,440,000 if the economy is normal and
$1,870,000 if the economy booms. The firm is considering a
$4,500,000 bond issue with an attached interest rate of 6 percent.
The bond proceeds will be used to repurchase shares. Ignore taxes.
What will the earnings per share be after the repurchase if the
economy is normal?
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