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  3. you are a buy-side analyst and you have gathered t

You are a buy-side analyst and you have gathered the information shown in the table...

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Accounting

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You are a buy-side analyst and you have gathered the information shown in the table regarding Cratchit Industries. Cratchit plans to borrow $10 million by issuing bonds with an annual coupon of 6% (and yield of 6%). Cratchit will use the borrowed money to repurchase shares on the open market. You estimate that EBIT next year (Year 1) will be the same as Year 0. Assume that the money is borrowed and the repurchase is executed at the beginning of Year 1. EBIT Tax Rate EPS Selected Financial Information Shares Outstanding Debt Cratchit Industries Inc. Stock Price Year 0 $9,230,769 35% 2,000,000 $3 $0 $30 What is the end of Year 1 EPS (after the buyback)? Round your answer to the nearest cent

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