Edsel Research Labs has $$26\mathrm{.}40$ million in assets. Currently half of these assets are financed with long$-$term debt at $6$ percent and $1$ ill with common stock having a par value of $$10.$ Ms$.$ Edsel, the Vice President of Finance, wishes to analyze two refinancing plans, one with more debt $($D$)$ and one with more equity $(E).$ The company earns a return on assets before interest and taxes of $8$ percent. The tax rate is $30$ percent.

Under Plan D$,$ a $$6\mathrm{.}60$ million long$-$term bond would be sold at an interest rate of $8$ percent and $660,000$ shares of stock would be purchased in the market at $$10$ per share and retired. Under Plan $E,660,000$ shares of stock woulty be sold at $$10$ per share and the $$6,600,000$ in proceeds would be used to reduce long$-$term debt.

a$-1.$ Compute earnings per share considering the current plan and the two new plans.

Note: Round your answers to $2$ decimal places.

$\backslash$table$[[,\backslash$table$[[$Earnings per$],[$Share$]]],[$Current$,$$$,0\mathrm{.}42],[$Plan D$,$$$,0\mathrm{.}20],[$Plan E$,$$$,1\mathrm{.}26]]$

a$-2.$ Which plan$($s$)$ would produce the highest EPS? Note that due to tax loss carry$-$forwards and carry$-$backs, taxes can be a negative number.

Plan D

Plan $E$

Current Plan

Current Plan