Honeycutt Co. is comparing two different capital structures. Plan I would result in 12,700 shares of stock and $109,250 in debt. Plan II would result in 9,800 shares of stock and $247,000 in debt. The interest rate on the debt is 10 percent.

a. Ignoring taxes, compare both of these plans to an all-equity plan assuming that EBIT will be $79,000. The all-equity plan would result in 15,000 shares of stock outstanding. What is the EPS for each plan?

b. What is the break-even level of EBIT for Plan I as compared to that for an all-equity plan? What about for Plan II as compared to the all-equity plan?

c. What is the break-even level of EBIT for Plan I as compared to Plan II?

d-1. Assuming the corporate tax rate is 21 percent, what is the EPS for each plan?

d-2. Assuming the corporate tax rate is 21 percent, what is the break-even level of EBIT for Plan I as compared to that for an all-equity plan? What about for Plan II as compared to the all-equity plan?

d-3. Assuming the corporate tax rate is 21 percent, what is the break-even level of EBIT for Plan I as compared to Plan II?

a. c. Plan I EPS Plan II EPS All-equity plan EPS b. Plan I and all-equity break-even EBIT Plan II and all-equity break-even EBIT Plan I and Plan Il break-even EBIT d-1. Plan I EPS Plan II EPS All-equity plan EPS d-2. Plan I and all-equity break-even EBIT Plan II and all-equity break-even EBIT d-3. Plan I and Plan Il break-even EBIT