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ABF Corp is an unlevered firm that has total assets of $5,750, earnings before interest...

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Accounting

ABF Corp is an unlevered firm that has total assets of $5,750, earnings before interest and taxes of $600, and 500 shares of stock outstanding. Assume the firm decides to change 40 percent of its capital structure to debt with an interest rate of 8 percent. Ignore taxes. What will be the amount of the change in the earnings per share as a result of this change in the capital structure?

A. No change B. -$.19 C. -$.35 D. $.91

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