King Lyon has the following assets: Current assets Capital assets Total assets During 4 months of the year, current assets drop to $1,300,000 (total assets will then be $9,100,000). Its operating profit (EBIT) is expected to be $492,500. Its tax rate is 20 percent. Shares are valued at $20. Its capital structure is short-term financing at 2 percent and long-term financing of 40 percent equity, 60 percent debt at 4 percent. $2,860,000 7,800,000 $10,660,000 a. Calculate expected EPS if the firm is perfectly hedged. (Do not round intermediate calculations and round your final answer to 2 decimal places.) EPS $ 0.14

King Lyon has the following assets: Current assets Capital assets Total assets During 4 months of the year, current assets drop to $1,300,000 (total assets will then be $9,100,000). Its operating profit (EBIT) is expected to be $492,500. Its tax rate is 20 percent. Shares are valued at $20. Its capital structure is short-term financing at 2 percent and long-term financing of 40 percent equity, 60 percent debt at 4 percent. $2,860,000 7,800,000 $10,660,000 a. Calculate expected EPS if the firm is perfectly hedged. (Do not round intermediate calculations and round your final answer to 2 decimal places.) EPS $ 0.14

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 5P

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