Question: ABC Co. is comparing two different capital structures. Plan I would result in 1,000 shares of stock and $30,000 in debt. The interest rate on

ABC Co. is comparing two different capital structures. Plan I would result in 1,000 shares of stock and $30,000 in debt. The interest rate on the debt is 10 percent. Plan II would be an all-equity plan with 3000 shares of stock. Find the break-even level of EBIT. At an EBIT level of $5,000, which plan will have a higher level of EPS?

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