Question

Equity-financed with 100,000 shares. An issue of $260,000 of debt with 12%

interest. Repurchase 26,000 shares at $10 per share. $126,000 will be profits before interest

A. What is the ratio of price to be expected earnings before it borrows the $260,000?

B. What will the ratio be after it borrows? 

Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"