Trapper 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 195,000 shares of stock outstanding Under Plan II, there would be 145,000 shares of stock outstanding and $2 1 million in debt outstanding The interest rate on the debt is 8 percent, and there are no taxes a If EBIT is $550,000, what is the EPS for each plan (Do not round intermediate calculations and round your answers to 2 decimal places, e g , 32 16 ) b If EBIT is $800,000, what is the EPS for each plan (Do not round intermediate calculations and round your answers to 2 decimal places, e g , 32 16 ) c What is the break even EBIT (Do not round intermediate calculations Enter your answer in dollars, not millions of dollars, e g , 1,234,567 )

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Question: Trapper 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

Trapper 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 195,000 shares of stock outstanding. Under Plan II, there would be 145,000 shares of stock outstanding and $2.1 million in debt outstanding. The interest rate on the debt is 8 percent, and there are no taxes.

a.	If EBIT is $550,000, what is the EPS for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
b.	If EBIT is $800,000, what is the EPS for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
c.	What is the break-even EBIT? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.)

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