Question: 2 . Nova Corp. is considering different capital structures. Option A would result in 1 3 , 0 0 0 shares of stock and $

2.Nova Corp. is considering different capital structures. Option A would result in 13,000
shares of stock and $130,500 in debt. Option B would result in 10,400 share of stock
and $243,600 in debt. Option C would be an all equity plan of 16,000 shares. The
interest rate on the debt is 10%. There is also no tax. (7 points)
a. Assuming an EBIT of $56,000, which of the three options would yield the highest
EPS?
b. What are the break-even levels of EBTIT for Option A and B as compared to that
of all equity Option C? Is one higher than the other? Why?

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