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Business, 09.04.2020 23:51 EllaLovesAnime

Byrd 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 155,000 shares of stock outstanding. Under Plan II, there would be 105,000 shares of stock outstanding and $1.33 million in debt outstanding. The interest rate on the debt is 6 percent and there are no taxes.

a. If EBIT is $200,000, what is the EPS for each plan?
b. If EBIT is $450,000, what is the EPS for each plan?
c. What is the break-even EBIT?

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