Question: B PBR Inc. is evaluating the following three financing options, and it has 50% corporate tax rate. Option A Option B Option C Common Stock:
B PBR Inc. is evaluating the following three financing options, and it has 50% corporate tax rate. Option A Option B Option C Common Stock: $200,000 Common Stock: $100,000 Common Stock: $100,000 Bonds: $100,000 @8% Preferred Stock: $100,000 interest rate @8% interest rate Assumptions: a) Common Stock can be bought or sold @$20/share b) EBIT under all three options is $80,000 Requirements: 1) Determine EPS under each option 2) Determine the financial break-even point(s) under each option 3) Submit your analysis with your calculations
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