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Business, 21.07.2020 21:01 angela563

Hale 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 180,000 shares of stock outstanding. Under Plan II, there would be 130,000 shares of stock outstanding and $1.8 million in debt outstanding. The interest rate on the debt is 6 percent and there are no taxes. a. If EBIT is $225,000, 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 $475,000, 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.) Break-even EBIT $

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Hale Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a le...
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