Campbell Nuts, Inc., has $25,000 of debt, with an annual
interest expense of 12 percent. The number of shares outstanding is
7,500. The firm continues to face the four cash flow scenarios;
recession, normal, growth and boom. Given a corporate tax rate of
34 percent, complete the following table:
State
Earnings before interest and taxes
Interest expense
Net income before taxes
Taxes
Net income
Earnings per share
Recession
$4,000
?
?
?
?
?
Normal
?
?
$5,000
?
?
?
Growth
?
?
?
?
?
$0.85
Boom
?
?
?
$3,740
?
?
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