Question: ACME Inc. is comparing two different capital structures: an all - equity plan and a levered plan. Under Plan I, the company would have 2

ACME Inc. is comparing two different capital structures: an all-equity plan and a levered plan. Under Plan I, the company would have 200,000 shares of stock outstanding. Under Plan II, there would be 150,000 shares of stock outstanding and $1,000,000 in debt outstanding. The interest rate on the debt is 6% and there are no taxes.
If EBIT is $500,000, what will be the highest EPS?

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