Question: Foundation, Incorporated, is comparing two different capital structures, an all - equity plan ( Plan I ) and a levered plan ( Plan II )

Foundation, Incorporated, is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 170,000 shares of stock outstanding. Under Plan II, there would be 120,000 shares of stock outstanding and $1.6 million in debt outstanding. The interest rate on the debt is 8 percent, and there are no taxes.
a. If EBIT is $525,000, what is the EPS for each plan?
Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g.,32.16.
b. If EBIT is $775,000, what is the EPS for each plan?
Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g.,32.16.
c. What is the break-even EBIT?
Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g.,1,234,567.
\table[[a. Plan I EPS,],[Plan II EPS,],[b. Plan I EPS,],[Plan II EPS,],[c. Break-even EBIT,]]
 Foundation, Incorporated, is comparing two different capital structures, an all-equity plan

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