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Business, 30.10.2019 05:31 v4leriaaa

Franklin 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 200,000 shares of stock outstanding. under plan ii, there would be 150,000 shares of stock outstanding and $2.2 million in debt outstanding. the interest rate on the debt is 5 percent and there are no taxes.

a. if ebit is $350,000, what is the eps for each plan? (do not round intermediate calculations and round your answers to 2 decimal places, e. g., 32.16.)

eps
plan i $
plan ii $

b. if ebit is $600,000, what is the eps for each plan? (do not round intermediate calculations and round your answers to 2 decimal places, e. g., 32.16.)

eps
plan i $
plan ii $

c. what is the break-even ebit? (enter your answer in dollars, not millions of dollars, e. g., 1,234,567. do not round intermediate calculations and round your answer to the nearest whole number, e. g., 32.)

break-even ebit $

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Answers: 1

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