What is the EPS and ROE?
O Debt: Take on $120,000 of debt with a 11% interest and $14,500 principle payments annually
O Current debt outstanding is $525,000 with 8% interest and $61,000 principle payments annually
O Current equity is $524,000 with 40,000 common shares and $2.45 dividend per share annually
O EBIT is expected to be $1,240,000 Tax rate 21% Industry average for Interest Coverage Ratio = 20.0
Assume EBIT in a bad economy is $285,000 and EBIT in a great economy is $2,550,000.