Question: Foxland, Incorporated, is comparing two different capital structures: an all - equity plan ( Plan I ) and a levered plan ( Plan II )
Foxland, Incorporated, is comparing two different capital structures: an allequity plan Plan I and a levered plan Plan II Under Plan I,
the company would have shares of stock outstanding. Under Plan II there would be shares of stock outstanding and
$ million in debt outstanding. The interest rate on the debt is percent, and there are no taxes.
a If EBIT is $ what is the EPS for each plan?
Note: Do not round intermedlate calculatlons and round your answers to decimal places, eg
b If EBIT is $ what is the EPS for each plan?
Note: Do not round Intermedlate calculations and round your answers to decimal places, eg
c What is the breakeven EBIT?
Note: Do not round intermedlate calculatlons and enter your answer In dollars, not millions of dollars, eg
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