Ms. Gold is in the widget business. She currently sells 1.5 million widgets a year...
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Ms Gold is in the widget business. She currently sells million widgets a year at $ each. Her variable cost to produce the widgets is $ per unit, and she has $ in fixed costs. Her salestoassets ratio is six times, and percent of her assets are financed with percent debt, with the balance financed by common stock at $ par value per share. The tax rate is percent. Her sisterinlaw, Ms Silverman, says Ms Gold is doing it all wrong. By reducing her price to $ a widget, she could increase her volume of units sold by percent. Fixed costs would remain constant, and variable costs would remain $ per unit. Her salestoassets ratio would be times. Furthermore, she could increase her debttoassets ratio to percent, with the balance in common stock. It is assumed that the interest rate would go up by percent and the price of stock would remain constant. Compute earnings per share under the Gold plan. Note: Round your answer to decimal places. Compute earnings per share under the Silverman plan. Note: Round your answer to decimal places.
Ms Gold is in the widget business. She currently sells million widgets a year at $ each. Her variable cost to produce the widgets is $ per unit, and she has $ in fixed costs. Her salestoassets ratio is six times, and percent of her assets are financed with percent debt, with the balance financed by common stock at $ par value per share. The tax rate is percent.
Her sisterinlaw, Ms Silverman, says Ms Gold is doing it all wrong. By reducing her price to $ a widget, she could increase her volume of units sold by percent. Fixed costs would remain constant, and variable costs would remain $ per unit. Her salestoassets ratio would be times. Furthermore, she could increase her debttoassets ratio to percent, with the balance in common stock. It is assumed that the interest rate would go up by percent and the price of stock would remain constant.
Compute earnings per share under the Gold plan.
Note: Round your answer to decimal places.
Compute earnings per share under the Silverman plan.
Note: Round your answer to decimal places.
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