Question: JUST NEED PARTS D2 + D3, EVERYTHING ELSE IS CORRECT! Kolby Corp. is comparing two different capital structures. Plan I would result in 13,000 shares

 JUST NEED PARTS D2 + D3, EVERYTHING ELSE IS CORRECT! Kolby

JUST NEED PARTS D2 + D3, EVERYTHING ELSE IS CORRECT!

Kolby Corp. is comparing two different capital structures. Plan I would result in 13,000 shares of stock and $100,000 in debt. Plan II would result in 10,500 shares of stock and $150,000 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 $90,000 The all-equity plan would result in 18,000 shares of stock outstanding. What is the EPS for each of these plans? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) EPS Plan I Plan II All equity 6.15 7.14 5.00 b. In part (a), what are the break-even levels of EBIT for each plan as compared to that for an all-equity plan? (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) EBIT Plan I and all-equity Plan Il and all-equity 36000 36000 c. Ignoring taxes, at what level of EBIT will EPS be identical for Plans and ? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) EBIT 36000 d-1. Assuming that the corporate tax rate is 40 percent, what is the EPS of the firm? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Plan I Plan II All equity 3.69 4.29 3.00 d-2. Assuming that the corporate tax rate is 40 percent, what are the break-even levels of EBIT for each plan as compared to that for an all-equity plan? (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Plan I and all-equity Plan Il and all-equity d-3. Assuming that the corporate tax rate is 40 percent, when will EPS be identical for Plans I and l? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g, EBIT

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