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17) Suppose that a company's equity is currently selling for $25.25 per share and that there are 5.30 million shares outstanding. If the firm also has 43 thousand bonds outstanding, which are selling at 107.50 percent of par, what are the firm's current capital structure weights for equity and debt respectively?

A) 65.46%, 34.54% B) 50%, 50% C) 74.33%, 25.67% D) 23.49%, 76.51%

18) Your company has a 34% tax rate and has $518 million in assets, currently financed entirely with equity. Equity is worth $41.80 per share, and book value of equity is equal to market value of equity. Also, let's assume that the firm's expected values for EBIT depend upon which state of the economy occurs this year, with the possible values of EBIT and their associated probabilities as shown below:

State	Recession	Average	Boom
Probability of State	.25	.55	.20
Expect EBIT in State	$68 million	$118 million	$188 million

The firm is considering switching to a 15-percent debt capital structure, and has determined that they would have to pay a 11 percent yield on perpetual debt in either event. What will be the level of expected EPS if they switch to the proposed capital structure? (Round your intermediate calculations and final answer to 2 decimal places except calculation of number of shares which should be rounded to nearest whole number.)

A) $4.67 B) $7.28 C) $21.83 D) $6.95

19) Suppose a firm pays total dividends of $320,000 out of net income of $2.7 million. What would the firm's payout ratio be?

A) .32 B) 1.19 C) .119 D) 8.438

20) Calculating Fees on a Loan Commitment You have approached your local bank for a start-up loan commitment for $1,500,000 needed to open an auto repair store. You have requested that the term of the loan be one-year. Your bank has offered you the following terms: size of loan commitment = $1,500,000, term = 1 year, up-front fee = 25 basis points, back-end fee = 40 basis points. If you take down 95 percent of the total loan commitment, calculate the total fees you have paid on this loan commitment.

A) $ 3,750 B) $ 9,450 C) $ 6,000 D) $ 4,050

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