Question: Kyle corporation is comparing two different capital structures and all equity plan (plan one) and a covered plan (plan two) under plan one, Kyle would

Kyle corporation is comparing two different capital structures and all equity plan (plan one) and a covered plan (plan two) under plan one, Kyle would have 775,000 shares of stock outstanding. Under plan two there would be 525,000 shares of stock outstanding and 9.75 million in debt outstanding, the interest rate on the debt is 7% and there are no taxes.

a) assume that they EBIT is 2.8 million commute EPS for Plan 1

b) assume that the EBIT is 2.8 million compute the EPS for plan two

c) assume that the EBIT is 3.3 million compute the EPS for Plan 1

d) Assume that the EBIT is 3.3 million compute the EPS for Plan 2

e) Whats the break even EBIT?

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