What is the break-even level of EBIT for Plan I as compared to that for an all-equity plan?

Cooke Co. is comparing two different capital structures. Plan I would result in 8500 shares of Show more Cooke Co. is comparing two different capital structures. Plan I would result in 8500 shares of stock and $361000 in debt. Plan II would result in 12000 shares of stock and $228000 in debt. The interest rate on the debt is 10 percent. Ignoring taxes compare both of these plans to an all-equity plan assuming that EBIT will be $61000. The all-equity plan would result in 18000 shares of stock outstanding. Compute the EPS for each plan. EPS Plan I $ Plan II $ All-equity plan $ Requirement 2: (a) In Requirement (1) What is the break-even level of EBIT for Plan I as compared to that for an all-equity plan? (Do not round intermediate calculations.) EBIT $ (b) In Requirement (1) what is the break-even level of EBIT for Plan II as compared to that for an all-equity plan? (Do not round intermediate calculations.) EBIT $ Assume the corporate tax rate is 35 percent. Assume the corporate tax rate is 35 percent. (a) Compute the EPS for each plan. EPS Plan I $ Plan II $ All-equity plan $ Requirement 2: (a) In Requirement (1) What is the break-even level of EBIT for Plan I as compared to that for an all-equity plan? (Do not round intermediate calculations.) EBIT $ (b) In Requirement (1) (Do not round intermediate calculations.) EBIT $ Assume the corporate tax rate is 35 percent. Assume the corporate tax rate is 35 percent. (a) Compute the EPS for each plan. EPS Plan I $ Plan II $ All-equity plan $ Show less

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