Question: Foundation, Incorporated, is comparing two different capital structures, an allequity plan (Plan I) and a levered plan (Plan ii). Under Plan 1, the company would
Foundation, Incorporated, is comparing two different capital structures, an allequity plan (Plan I) and a levered plan (Plan ii). Under Plan 1, the company would have 155,000 shares of stock outstanding. Under Plan 11, there would be 105,000 shares of stock outstanding and $13 million in debt outstanding. The interest rate on the debt is 6 percent, and there are no taxes. a. If EEIT is $200,000, what is the EPS for each plan? Note: Do not round Intermediate calculations and round your answers to 2 decimal places, e.9. 32.16. b. If EBIT is $450.000, What is the EPS for each pian? Notet Do not round intermediate calculations and round your answers to 2 decimal places, e.9., 32.16. c. What is the break-even EBIT? Noter Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, .,9.1,234,567
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