Question: Dickson Corporation is comparing two different capital structures. Plan I would result in 23,000 shares of stock and $81,000 in debt. Plan II would result

Dickson Corporation is comparing two different capital structures. Plan I would result in 23,000 shares of stock and $81,000 in debt. Plan II would result in 17,000 shares of stock and $243,000 in debt. The interest rate on the debt is 7 percent. Assume that EBIT will be $80,000. An all-equity plan would result in 26,000 shares of stock outstanding. Ignore taxes. What is the price per share of equity under Plan I? Plan II?

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