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Chapter $16$ Homework $($Empty$)$

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An all$-$equity firm has $3$ million shares outstanding and is considering borrowing $$5$ million at an annual rate of $7\%$ and using the proceeds to buy back one$-$fourth of its outstanding shares. What is the Break$-$Even EBIT? What is the EPS for each capital structure $($unlevered and levered$)$ at the Break$-$Even EBIT? What is the EPS for each capital structure at an EBIT of $$1\mathrm{.}8$ million? What is the EPS for each capital structure at an EBIT of $$800,000?$

EPS AT BREAK$-$EVEN EBIT

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EPS AT EBIT OF $$1,800,000$

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EPS AT EBIT OF $$1,000,000$

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Chapter $16$ Question $1$