Des Chatels Corp. is comparing two different capital structures. Plan I would result in $13,000$ shares of stock and $$130,500$ in debt. Plan II would result in $10,400$ shares of stock and $$243,600$ in debt. The interest rate on the debt is $10\%.$

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?

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?

Ignoring taxes, when will EPS be identical for Plans I and II$?$

Repeat parts $($a$),($b$),$ and $($c$)$ assuming that the corporate tax rate is $40\%.$ Are the break$-$even levels of EBIT different from before? Why or why not?