Question: Galaxy Products is comparing two different capital strcutures, an all - equity plan ( Plan I ) and a levered plan ( Plan II )
Galaxy Products is comparing two different capital strcutures, an allequity plan Plan I and a levered plan Plan II Under Plan I, Galaxy would hve 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. The projected EBIT is $ which capital structure plan would you prefer, if you were a shareholder in the firm? support your response with relevant computations
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