Question: Honeycutt Corp. is comparing two different capital structures. Plan I would result in 39,000 shares of stock and $108,000 in debt. Plan || would result
Honeycutt Corp. is comparing two different capital structures. Plan I would result in 39,000 shares of stock and $108,000 in debt. Plan || would result in 33,000 shares of stock and $324,000, in debt. The interest rate on the debt is 7 percent. Assume that EBIT will be $160,000. Att all-equity plan would result in 42,000 shares of stock outstanding. Ignore taxes. What is the price per share of equity under Plan 1? Plan II? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
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