Business, 15.04.2020 02:50 Prettygirlbuggy

M&M and Stock Value in problem 4 Round hammer is comparing two different capital structures: an all-equity plan (plan 1) and a levered plan (plan 2). Under plan 1, the company would have 205,000 shares of stock outstanding. Under plan 2, there would be 155,000 shares of stock outstanding and $3.1 million in debt outstanding. The interest rate on the debt is 8 percent, and there are no taxes. A) 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) B) if EBIT is $850,000, what is the EPS for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places). C) what is the break even EBIT? (Do not round intermediate calculations. Enter your answer in dollars, not in millions of dollars).

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M&M and Stock Value in problem 4 Round hammer is comparing two different capital structures: an...

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