You are a buy-side analyst researching the Gorilla Glass Co. Gorilla plans to borrow $11 million by issuing bonds with an annual coupon of 7% and a yield to maturity of 7%
Gorilla will use the borrowed money to repurchase shares on the open market at $40 per share. You have gathered the information, shown in the table, regarding the company prior to the repurchase. You estimate that EBIT for Year 1 will be the same as reported for Year 0. Assume that the money is borrowed and the repurchase is executed at the beginning of Year 1.
Gorilla Glass Co.
Dec 31, Year 0
EBIT $10,331,538
Tax Rate 35%
Shares Outstanding 3,000,000
EPS $2.5
Debt $0
Stock Price $40
What is the Year 1 EPS?
A) $2.00
B) $2.28
C) $2.80
D) $3.25
E) $3.52
B
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a. variable costs b. net income after tax c. fixed costs d. net income before tax
Len agrees to sell Doug some choice ocean-front property. If Len later refuses to convey the land, Doug may sue for:
a. liquidated damages b. specific performance c. ratification damages d. punitive damages e. none of the other choices since contract law does not apply to real property agreements
An outcome of environmental scanning is ________, which is the information necessary to decide how best to manage in a given competitive environment.
A. strategic vision B. corporate governance C. competitive dissertation D. competitive intelligence E. corporate espionage
Calculate the missing information on the following revolving charge account. Interest is calculated on the unpaid or previous month's balance, rounding to the nearest cent. Annual Monthly Purchases Payment Previous Percentage Periodic Finance and Cash and New Balance Rate (APR) Rate Charge Advances Credits Balance $212.69 1.75% $186.22 $50.00
What will be an ideal response?