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Business, 24.04.2020 19:28 paige1616

Honeycutt Corp. is comparing two different capital structures. Plan I would result in 31,000 shares of stock and $93,000 in debt. Plan II would result in 25,000 shares of stock and $279,000 in debt. The interest rate on the debt is 7 percent. Assume that EBIT will be $120,000. An all-equity plan would result in 34,000 shares of stock outstanding. Ignore taxes. What is the price per share of equity under Plan I? Plan II?

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