Dickson Corporation is comparing two different capital structures. Plan I would result in 20,000 shares of stock and $76,500 in debt. Plan II would result in 14,000 shares of stock and $229,500 in debt. The interest rate on the debt is 4 percent.

a. Ignoring taxes, compare both of these plans to an all-equity plan assuming that EBIT will be $65,000. The all-equity plan would result in 23,000 shares of stock outstanding. What is the EPS for each of these plans?

Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.

b. In part (a), what are the break-even levels of EBIT for each plan as compared to that for an all-equity plan?

Note: Do not round intermediate calculations.

c. Ignoring taxes, at what level of EBIT will EPS be identical for Plans I and II?

Note: Do not round intermediate calculations.

d-1. Assuming that the corporate tax rate is 21 percent, what is the EPS of the firm?

Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.

d-2. Assuming that the corporate tax rate is 21 percent, what are the break-even levels of EBIT for each plan as compared to that for an all-equity plan?

Note: Do not round intermediate calculations.

d-3. Assuming that the corporate tax rate is 21 percent, when will EPS be identical for Plans I and II?

Note: Do not round intermediate calculations.

\begin{tabular}{|l|l|} \hline a. Plan I EPS \\ \hline Plan II EPS \\ \hline All-equity EPS \\ \hline b. Plan I and all-equity break-even EBIT \\ \hline c. Plan II and all-equity break-even EBIT \\ \hline Plan I and Plan II break-even EBIT \\ \hline d-1. Plan I EPS & \\ \hline Plan II EPS & \\ \hline All-equity EPS & \\ \hline d-2. Plan I and all-equity break-even EBIT \\ \hline Plan II and all-equity break-even EBIT & \\ \hline d-3. Plan I and Plan II break-even EBIT \\ \hline \end{tabular}