Suppose the RNG Corporation has decided in favor of a capital restructuring that involves increasing its existing equity from $50 million to $ 100 million. The company’s current EPS (Earnings Per Share) is $ 2 and the shares trade at 50. If GNR wants the restructuring to increase its ROE (Return on Equity), but would except the same ROE as before the restructuring, what is the minimum level for EBIT that GNR's management must be expecting? Assume the company has no debt and its tax rate is 50%.
Date Posted: 21/11/2018
Category: Finance Due Date: 21/11/2018 Willing to Pay: $20.00