You are given the following estimated per share data related to the S&P Industries Index for the year 2013:
Sales ...........................$1,450.00
Depreciation ....................$58.00
Interest Expense ..............$28.00
You are also informed that the estimated operating profit (EBIT) margin is 12% and the tax rate is 32%.
a. Compute the estimated EPS for 2013.
b. Assume that a member of the research committee for your firm feels that it is important to consider a range of operating profit margin (OPM) estimates. Therefore, you are asked to derive both optimistic and pessimistic EPS estimates using 11% and 13% for the OPM and holding everything else constant.