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Use the data in the paragraph below and the information in t

Use the data in the paragraph below and the information in the table below to answer the next two qu… Show more Use the data in the paragraph below and the information in the table below to answer the next two questions. Wesley, Inc. is a levered firm with assets valued at $30,000 and $20,000 of debt issued at 10% interest. Wesley pays tax at the rate of 34%. The firm faces EBIT scenarios of recession and normal. {Note: EBIT= earnings before interest and tax, $Interest = dollar amount of interest owed on the debt, EBT = earnings before taxes, NI = net income, and EPS = earnings per share} EBIT $ Interest EBT Taxes NI EPS Recession $6000 $1.32 Normal $8000 23. What amount comes closest to the number of shares outstanding for Wesley? a. 1,800 b. 2,000 c. 2,200 d. 2,400 e. 4,100 24. What amount comes closest to the earnings per share of Wesley in the Normal scenario? a. $1.32 b. $1.67 c. $1.98 d. $0.91 e. $2.25 • Show less


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