'Break - Even EBIT and Leverage ( LOT , 2 ) Des Chatels Corp . is comparing two different capital structures . Plan I would result in 13, 000 shares of stock and $ 130, 500 in debt . Plan'1 would result in 10, 400 shares of stock and $243 , 600 in debt . The interest rate on the debt is 10 percent . Ignoring taxes , compare both of these plans to an all -equity plan assuming that EBIT will be $56 , 000 . The all-equity plan would result in 16 , 000 shares of stock outstanding . Which of the three plans has the highest EPS ? The lowest ? a In part ( a ) , what are the break -even levels of EBIT for each plan as compared to that for an all- equity plan ? Is one higher than the other ? Why ? a Ignoring taxes , when will EPS be identical for Plans I and !1 ? Repeat parts ( a ) , ( 6 ) , and ( C ) assuming that the corporate tax rate is 40 percent . Are* the break - even levels of EBIT different from before ? Why or why not