Knight Moves is considering two alternative financing plans. The firm is expected to operate at the $75 million EBIT level. Under Plan D (debt financing) EPS is expected to be $2.25, and under Plan E (equity financing) EPS is expected to be $1.82. If the market is expected to assign a P/E ratio of 12 to the debt plan and 15 to the equity plan, which plan should Knight pursue?
A) debt
B) equity
C) indifferent between the two alternatives
D) neither is satisfactory
B
You might also like to view...
If your boss believes that you are about to be ready to take over as a unit manager and she or he begins to provide special attention to your training and your development, she may be acting as which of the following?
A. negative Pygmalion B. positive Pygmalion C. neutral Pygmalion D. an ambivalent outside party
Albert, Billy, and Cathy share profits and losses of their partnership as 1:4:3, respectively. If the net income is $30,000, calculate Albert's share of the profits. (Do not round any intermediate calculations.)
A) $7500 B) $11,250 C) $15,000 D) $3750
Companies whose securities are sold to the general public must adhere to standards established by the Securities and Exchange Commission
Indicate whether the statement is true or false
All of the following are media formats used for distributing content EXCEPT
A) trade journals. B) catalogs. C) broadcast radio. D) blogs. E) newspapers.