Question: 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

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%. a. 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. What is the EPS for each of these plans? (Round the final answers to 2 decimal places. Omit $ sign in your response.) EPS Plan I $ Plan II $ All equity $ b. In part (a), what are the breakeven levels of EBIT for each plan as compared to that for an all-equity plan? (Do not round intermediate calculations. Omit $ sign in your response.) EBIT Plan I and all-equity $ Plan II and all-equity $ c. Ignoring taxes, at what level of EBIT will EPS be identical for Plans I and II? (Do not round intermediate calculations. Omit $ sign in your response.) EBIT $ d-1 Assuming that the corporate tax rate is 40%, what is the EPS of the firm? (Round the final answers to 2 decimal places. Omit $ sign in your response.) EPS Plan I $ Plan II $ All equity $ d-2 Assuming that the corporate tax rate is 40%, what are the breakeven levels of EBIT for each plan as compared to that for an all-equity plan? (Do not round intermediate calculations. Omit $ sign in your response.) EBIT Plan I and all-equity $ Plan II and all-equity $ d-3 Assuming that the corporate tax rate is 40%, when will EPS be identical for Plans I and II? (Do not round intermediate calculations. Omit $ sign in your response.) EBIT $

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