A firm has earnings per share of $2.12 on 40,000 shares outstanding. The firm also has $360,000 in debt at a cost of 9%. Ignore taxes. What is the EBIT?
A) $84,800
B) $91,600
C) $102,300
D) $117,200
E) $119,700

Question

Quizplus · Accepted Answer

To find EBIT, calculate total earnings: $2.12 * 40,000 = $84,800. Interest on debt is $360,000 * 9% = $32,400. EBIT = Earnings + Interest = $84,800 + $32,400 = $117,200.

A Firm Has Earnings Per Share of $2