Question: Please make sure the answers are correct and explain how you got them, thanks! Dickson Corporation is comparing two different capital structures. Plan I would
Dickson Corporation is comparing two different capital structures. Plan I would result in 25,000 shares of stock and $84,000 in debt. Plan Il would result in 19,000 shares of stock and $252,000 in debt. The interest rate on the debt is 5 percent 0. Ignoring taxes, compare both of these plans to an all-equity plan assuming that EBIT will be $90,000. The oll-equity plan would result in 28,000 shares of stock outstanding. What is the EPS for each of these plans? Note: Do not round intermediate calculations and round your onswers to 2 decimal places, e.9., 32.16. b. In part (a), what are the break-even levels of EBIT for each plon as compared to that for an all-equity plan? Note: Do not round intermediate calculations. c. Ignoring toxes, at what level of EBIT will EPS be identical for Plans I and II? Note: Do not round intermediate calculations. d.1. Assuming that the corporote tax rate is 21 percent, what is the EPS of the firm? Note: Do not round intermediate calculations and round your onswers to 2 decimal places, e.g., 32.16 . d.2. Assuming thot the corporate tox rate is 21 percent, what are the break-even levels of EBIT for each plan as compared to that for an ollequity plan? Note: Do not round intermediote calculotions. d.3. Assuming that the corporate tax rate is 21 percent, when will EPS be identical for Pians I and II? Note: Do not round intermediate calculations
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