Ski and Board are two identical firms of identical size operating in identical markets. Ski is unlevered with assets valued at $13000 and has 650 shares of stock outstanding Board also has $13000 in assets and has $4000 in debt financed at an interest rate of 9.00% and has 450 shares of stock outstanding Both Ski and Board pay tax at the rate of 30%. Calculate the level of EBIT that would make earnings per share the same for Ski and Board $ _______ Place your answer to the nearest dollar. If applicable, your answer should NOT include a comma.

Ski and Board are two identical firms of identical size operating in identical markets. Ski is unlevered with assets valued at $13000 and has 650 shares of stock outstanding Board also has $13000 in assets and has $4000 in debt financed at an interest rate of 9.00% and has 450 shares of stock outstanding Both Ski and Board pay tax at the rate of 30%. Calculate the level of EBIT that would make earnings per share the same for Ski and Board $ _______ Place your answer to the nearest dollar. If applicable, your answer should NOT include a comma.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section2.A: Taxes

Problem 6P

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