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 company would

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 760,000 shares of stock outstanding. Under Plan II, there would be 510,000 shares of stock outstanding and $9 million in debt outstanding. The interest rate on the debt is 10 percent, and there are no taxes.

a.Assume thatEBIT is $2.5 million. Compute the EPS for both Plan I andPlan II.(Do not round intermediate calculations and round your answers to 2 decimal places, 32.16.)

Solved Already: Plan 1: $3.29 Plan 2: 3.14

b.Assume thatEBIT is $3 million. Compute the EPS for both Plan I andPlan II.(Do not round intermediate calculations and round your answers to 2 decimal places, 32.16.)

Solved Already: Plan 1: $3.95 Plan 2: 4.12

c.What is the break-even EBIT? STILL NEED TO SOLVE

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