Question: TCH Corporation is considering two alternative capital structures with the following characteristics The firm will have total assets of $500,000, a tax rate of 40

TCH Corporation is considering two alternative capital structures with the following

TCH Corporation is considering two alternative capital structures with the following characteristics The firm will have total assets of $500,000, a tax rate of 40 percent, and a book value per share of $10 and is currently all equity financed. Regardless of the capital structure. EBIT is expected to be $200,000 for the coming year. The money borrowed will be used to buy back the shares and the purchase price is expected to remain at $10 per share. What is the difference in earnings per share (EPS) between the two alternatives

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