(Using EBIT-EPS break-even analysis) Home Depot, Inc. (HD), had 1244 million shares of common stock outstanding in
Posted: Sun May 29, 2022 6:13 pm
(Using EBIT-EPS break-even analysis) Home Depot, Inc.
(HD), had 1244 million shares of common stock outstanding in 2016,
whereas Lowes Companies, Inc. (LOW), had 929 million shares
outstanding. Assuming Home Depot's 2016 interest expense is $919
million, Lowes' interest expense is $552 million, and a
35 percent tax rate for both firms, what is their break-even
level of operating income (i.e., the level of EBIT where EPS is
the same for both firms)?
The EBIT indifference level is $
(HD), had 1244 million shares of common stock outstanding in 2016,
whereas Lowes Companies, Inc. (LOW), had 929 million shares
outstanding. Assuming Home Depot's 2016 interest expense is $919
million, Lowes' interest expense is $552 million, and a
35 percent tax rate for both firms, what is their break-even
level of operating income (i.e., the level of EBIT where EPS is
the same for both firms)?
The EBIT indifference level is $