Business, 07.12.2021 03:30 rocky8875

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 185,000 shares of stock outstanding. Under Plan II, there would be 135,000 shares of stock outstanding and $1.92 million in debt outstanding. The interest rate on the debt is 7 percent and there are no taxes. Required:
a. If EBIT is $375,000, what is the EPS for each plan?
b. If EBIT is $625,000, what is the EPS for each plan?
c. What is the break-even EBIT?

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

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