Question: Kyle Corporation is comparing two different capital structures, an all - equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the

Kyle Corporation is comparing two different capital structures, an all -

Kyle Corporation is comparing two different capital structures, an all - equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 785,000 shares of stock outstanding. Under Plan II, there would be 535,000 shares of stock outstanding and exist10 25 million in debt outstanding. The interest rate on the debt is 12 percent, and there are no taxes. a. Assume that EBIT is exist3 million. Compute the EPS for both Plan I and Plan II. (Do not round intermediate calculations and round your answers to 2 decimal places, 32.16.) b. Assume that EBIT is exist3.5 million. Compute the EPS for both Plan I and Plan II. (Do not round intermediate calculations and round your answers to 2 decimal places, 32.16.) c. What is the break - even EBIT? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1, 234, 567. Round your answer to the nearest whole number, e.g., 32.)

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