Question: 1. Trapper Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company

1. Trapper Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 380,000 shares of stock outstanding. Under Plan II, there would be 250,000 shares of stock outstanding and $2,272,000 in $ debt outstanding. The interest rate on the debt is 10 percent, and there are no taxes. a. If EBIT is $500,000, which plan will result in higher EPS? b. If EBIT is $1050,000, which plan will result in the higher EPS? c. What is the break-even EBIT

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