An analyst gathered the following data about a company for the coming year: Sales are estimated to be $3,000,000. The company's tax rate will be 30%. Interest expense will be $150,000. The company has 180,000 common shares outstanding. The estimated depreciation expense will be $200,000. Earnings before interest, taxes, depreciation, and amortization (EBITDA) profit margin is estimated to be 20%. The analyst's estimate of the company's earnings per share (EPS) would be: A. $0.42. B. $0.97. C. $1.98. D. $4.63.

An analyst gathered the following data about a company for the coming year: Sales are estimated to be $3,000,000. The company's tax rate will be 30%. Interest expense will be $150,000. The company has 180,000 common shares outstanding. The estimated depreciation expense will be $200,000. Earnings before interest, taxes, depreciation, and amortization (EBITDA) profit margin is estimated to be 20%. The analyst's estimate of the company's earnings per share (EPS) would be: A. $0.42. B. $0.97. C. $1.98. D. $4.63.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 20P

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