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NEW QUESTION: 1
Copybold Corporation is a start-up firm considering two alternative capital structures--one is conservative and the other aggressive. The conservative capital structure calls for a D/A ratio = 0.25, while the aggressive strategy call for D/A = 0.75. Once the firm selects its target capital structure it envisions two possible scenarios for its operations: Feast or Famine. The Feast scenario has a 60 percent probability of occurring and forecast EBIT in this state is $60,000. The Famine state has a 40 percent chance of occurring and the EBIT is expected to be $20,000. Further, if the firm selects the conservative capital structure its cost of debt will be 10 percent, while with the aggressive capital structure its debtcost will be
12 percent. The firm will have $400,000 in total assets, it will face a 40 percent marginal tax rate, and the book value of equity per share under either scenario is $10.00 per share. What is the difference between the EPS forecasts for Feast and Famine under the conservative capital structure?
A. $0.44
B. $0.80
C. $2.20
D. $1.00
E. $0
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Debt = 25% = $100,000; Equity = 75% = $300,000; Total assets = $400,000.
Feast Famine
Probability0.60.4
EBIT$60,000$20,000
Less: Interest10,00010,000
EBT$50,000$10,000
Less: Taxes20,0004,000
NI$30,000$6,000
# shares30,00030,000
EPS$1.00$0.20
Difference in EPS for conservative capital structure:
EPS(Feast) - EPS(Famine) = $1.00 - $0.20 = $0.80.

NEW QUESTION: 2
Which of the following is a valid Write Mode action in the Connector Stages?
A. Update
B. Delete
C. Insert
D. All of the above
Answer: D

NEW QUESTION: 3
DRAG DROP

Answer:
Explanation:

Explanation:

NEW QUESTION: 4
以下を参照してください。 「cisco」とはどんな種類のパスワードですか。
Router（config）＃serviceパスワード暗号化
ルータ（設定）#username管理者パスワードcisco
A. タイプ0
B. 拡張
C. CHAP
D. タイプ7
Answer: D