There are no taxes. EBIT is expected to be $2.5 million, but could be as high as $3.5 million if an economic expansion occurs, or as low as $2 million if a recession occurs. All values are market values.

What is EPS under the current capital structure if there is a recession?
A) $3.33
B) $4.17
C) $5.00
D) $6.25

Question

There are no taxes. EBIT is expected to be $2.5 million, but could be as high as $3.5 million if an economic expansion occurs, or as low as $2 million if a recession occurs. All values are market values.

What is EPS under the current capital structure if there is a recession?

What is EPS under the current capital structure if there is a recession?
A) $3.33 
B) $4.17 
C) $5.00 
D) $6.25

Quizplus · Accepted Answer

The Answer of  There are no taxes. EBIT is expected to be $2.5 million, but could be as high as $3.5 million if an economic expansion occurs, or as low as $2 million if a recession occurs. All values are market values.

What is EPS under the current capital structure if there is a recession?
A) $3.33 
B) $4.17 
C) $5.00 
D) $6.25

There Are No Taxes