Question

Dickson Corporation is comparing two different capital structures. Plan I would result in 31,000 shares of stock and $93,000 in debt. Plan II would result in 25,000 shares of stock and $279,000 in debt. The interest rate on the debt is 7 percent. Assume that EBIT will be $120,000. An all-equity plan would result in 34,000 shares of stock outstanding. Ignore taxes. What is the price per share of equity under Plan I? Plan II? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Plan I $ 3.66 Plan II $ 40.12

          Dickson Corporation is comparing two different capital structures. Plan I would result in 31,000 shares of stock and $93,000 in debt.
Plan II would result in 25,000 shares of stock and $279,000 in debt. The interest rate on the debt is 7 percent. Assume that EBIT will
be $120,000. An all-equity plan would result in 34,000 shares of stock outstanding. Ignore taxes. What is the price per share of equity
under Plan I? Plan II?
Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.
Plan I
$ 3.66
Plan II
$ 40.12

dickson corporation is comparing two different capital structures plan i would result in 31000 shares of stock and 93000 in debt plan ii would result in 25000 shares of stock and 279000 in d 58648

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