Question: Break - Even EBIT ( with and without taxes ) . Alpha company is looking at two different capital structures, one an all - equity
BreakEven EBIT with and without taxes Alpha company is looking at two different capital structures, one an allequity firm and the other a leveled firm with $ million of debt financing at interest. The allequity firm will have a value of $ million and shares outstanding. The levered firm will have shares outstanding. A Find the breakeven EBIT for Alpha Company using EPS if there are no corporate taxes. B Find the breakeven EBIT for Alpha Company using EPS if the corporate tax rate is C What do you notice about these two breakeven EBITs for Alpha Company?
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