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a.
Find the break-even EBIT for Alpha Company using EPS if there are no corporate
taxes.
b.
Find the break-even EBIT for Alpha Company using EPS if the corporate tax rate
is 15%.
c.
What do you notice about these two break-even EBITs for Alpha Company?
P7-1 (similar to)
Anderson Motors, Inc. has just set the company dividend policy at $0.85 per year. The
company plans to be in business forever. What is the price of this stock if
a.
an investor wants a return of 4%?
b.
an investor wants a return of 7%?
c.
an investor wants a return of 9%?
d.
an investor wants a return of 16%?
e.
an investor wants a return of 18%?
P7-2 (similar to)
Dietterich Electronics wants its shareholders to earn a return of 9% on their investment in
the company. At what price would the stock need to be priced today if Dietterich
Electronics had a
a.
$0.40 constant annual dividend forever?
b.
$1.10 constant annual dividend forever?
c.
$1.60 constant annual dividend forever?
d.
$2.90 constant annual dividend forever?
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FIN 419 Week 4 Team Assignment Problem Set (New)
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Ch 10 Advanced Problem 2
Chapter 13 Problem 18