Assume an unlevered firm has total assets of $6,000, earnings before interest and taxes of...
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Finance
Assume an unlevered firm has total assets of $6,000, earnings before interest and taxes of $600, and 500 shares of stock outstanding. Further assume the firm decides to change 40 percent of its capital structure to debt with an interest rate of 8 percent. Ignore taxes. What will be the amount of the change in the earnings per share as a result of this change in the capital structure?
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