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Business, 31.05.2021 15:00 Cheyenneross366

Loki Revengers has expected sales of $650 million a year. Variable costs are expected to be 65 percent of sales and fixed operating costs are $200000000 a year. Total capital is presently $500000000 and must be expanded to $700000000 to generate the anticipated sales level. The company presently has no debt outstanding, and 2670000 shares of stock. Additional common stock could be sold for $150 a share. The interest rate on new debt would be 6 percent and the tax rate is 21 percent. Required:
Compute the return on equity and earnings per share assuming the expansion is financed.

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Loki Revengers has expected sales of $650 million a year. Variable costs are expected to be 65 perce...

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