MassNet Corporation has 9

Finance Aug 07, 2020

MassNet Corporation has 9.85 million shares outstanding and debt with interest payments of $1.27 million. What earnings before interest and tax (EBIT) must the firm have if it were to provide $1 per share to the shareholders? Assume perfect markets.

Answer:$ _________million

Expert Solution

Computation of the earnings before interest and tax (EBIT):-

Earnings before interest and tax (EBIT) = (Earnings per share * Number of shares) + Interest on debt

= ($1 * 9.85) + $1.27

= $9.85 + $1.27

= $11.12 million

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