Help solve these please with explanation so that I can use it to review for a test.

1. A firm currently uses no debt financing. It currently has 500,000 shares outstanding. The price per share is $25. It is considering restructuring using $6,000,000 million in debt with an interest rate of 8%. Assume the corporate tax rate is 30%. Calculate the breakeven EBIT. Show that EPS and ROE are the same for the case of no debt financing and debt financing at the breakeven EBIT. No Debt Debt Breakeven EBIT Interest EBT Taxes NI EPS ROE 2. A company is comparing two different capital structures, an all equity plan (Plan1) and a levered plan (Plan 2). Under plan 1, the firm would have 150,000 shares of stock outstanding. Under Plan 2, there would be 60,000 shares of stock outstanding and $1.5 million in debt outstanding. The interest rate on the debt is 10% and the tax rate is 40%. a. If EBIT is $200,000, which plan will result in the higher EPS? b. If EBIT is $700,000, which plan will result in the higher EPS