Complete the following EPS/EBIT analysis for a company whose stock price is $20, interest rate on funds is 5 percent, tax rate is 20 percent, number of shares outstanding is 500 million, and EBIT range is

$100 million to $300 million. The firm needs to raise

$200 million in capital. Use the following table to complete the work.

100%

Common Stock 100% Debt Financing 20% Debt–

80% Stock Financing EBIT Interest EBT Taxes EAT

#Shares EPS