My question is Q7, leverage and stock value , thank you veru much !

Under Plan I, the company would UL Uutstanding. Under Plan II, there would be 140,000 f stock outstanding and $1,787,500 in debt outstanding. The interest rate on uctures! an shares of stock out the debt is 8 percent, and there are a. If EBIT is $40 EBIT is $400,000, which plan will result in the higher EPS? 1 EBIT is $600,00, which plan will result in the higher EPS? c. What is the break even EBIT? nd Stock Value LO1] In Problem 4, use M&M Proposition I to find the share of equity under each of the two proposed plans. What is the value of 5 M&M and Stock price per share of equit the firm? 6. Break-Even Even EBIT and Leverage (LO1, 2Haskell Corp. is comparing two dif- Carent capital structures. Plan I would result in 13.000 shares of stock and $130.500 eht Plan II would result in 10,400 shares of stock and $243,600 in debt. The interest rate on the debt is 10 percent. 2. Ignoring taxes, compare both of these plans to an all-equity plan assuming that EBIT will be $56,000. The all-equity plan would result in 16,000 shares of stock outstanding. Which of the three plans has the highest EPS? The lowest? b. In part (a), what are the break-even levels of EBIT for each plan as compared to that for an all-equity plan? Is one higher than the other? Why? c. Ignoring taxes, when will EPS be identical for Plans I and II? d. Repeat parts (a), (b), and (c) assuming that the corporate tax rate is 40 percent. Are the break-even levels of EBIT different from before? Why or why not? 1. Leverage and Stock Value (LO1] Ignoring taxes in Problem 6, what is the price per share of equity under Plan I? Plan II? What principle is illustrated by your answers? Homemade Leverage (LO1] Desert Rose, Inc., a prominent consumer products "15 debating whether to convert its all-equity capital structure to one that is is $45. EBIT is expected rcent debt. Currently, there are 6,500 shares outstanding, and the price per share BTT is expected to remain at $29,000 per year forever. The interest rate on w debt is 8 percent, and there are no taxes. 1 shareholder of the firm, owns 100 shares of stock. What is her cash flow e current capital structure, assuming the firm has a dividend payout rate under the current of 100 percent? b. What will Allison's c lison's cash flow be under the proposed capital structure of the firm? assume she keeps all 100 of her shares