Question: Corporation is comparing two different capital structures. Plan I would result in 25,000 shares of stock and $84,000 in debt. Plan II would result in

Corporation is comparing two different capital structures. Plan I would result in 25,000 shares of stock and $84,000 in debt. Plan II would result in 19,000 shares of stock and $252,000 in debt. The interest rate on the debt is 5 percent. Assume that EBIT will be $90,000. An all-equity plan would result in 28,000 shares of stock outstanding. Ignore taxes. What is the price per share of equity under Plan I? Plan

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