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River Cruises is all- equity- financed . Current Data Vumber of shares 100, 000 Price per share 10 Market value of shares $ 1 , 000 , 000 State of...
Can someone please help with this? I may be overthinking it a bit. Thank You.
River Cruises is all- equity- financed .Current DataVumber of shares100, 000Price per share10Market value of shares$ 1 , 000 , 000State of the Economy\SlumpNormalBoomProfits before interest76 , 000127, 000188 , 500Suppose it now issues $250, 000 of debt at an interest rate of 10% and uses the proceeds to repurchase*25, 000 shares . Assume that the firm pays no taxes and that debt finance has no impact on firm value ."Refer to the above table to compute the missing data . I Do not round intermediate calculations . Round" Earnings per share " to 3 decimal places . Enter " Return on shares" as a percent rounded to 2decimal places . !`OutcomesNumber of sharesPrice per share*Market value of sharesMarket value of debtState of the EconomyslumpNormal300 mProfits before interest76, 000*127 , 000188 , 500|InterestEquity earningsEarnings per shareReturn on shares19/0Expected Outcome