Nielson Motors is currently an all equity financed firm.  It…

Nielson Motors is currently an all equity financed firm.  It expects to generate EBIT of $14 million over the next year.  Currently Nielson has 8 million shares outstanding and its stock is trading at $20.00 per share.  Nielson is considering changing its capital structure by borrowing $40 million at an interest rate of 2% and using the proceeds to repurchase shares.  Assume perfect capital markets and there is no tax. Nielson’s EPS if they change their capital structure is closest to:

Wyatt Oil issued $200 million in perpetual debt (at par) wit…

Wyatt Oil issued $200 million in perpetual debt (at par) with an annual coupon of 7%. Wyatt will pay interest only on this debt. Wyatt’s marginal tax rate is expected to be 50% for the foreseeable future.  Wyatt’s annual interest tax shield and the present value of interest tax shield are close to _____ respectively: