$11.$ An all$-$equity firm has $3$ million shares outstanding and is considering borrowing $$5$ million at an annual rate of $7\%$ and using the proceeds to buy $2$ back one$-$fourth of its outstanding shares. What is the Break$-$Even EBIT? What is the EPS for each capital structure $($unlevered and levered$)$ at the $3$ Break$-$Even EBIT? What is the EPS for each capital structure at an EBIT of $$1\mathrm{.}8$ million? What is the EPS for each capital structure at an EBIT of $4$$$800,000?$

$5$

UNLEVERED FIRM

SHARES OUTSTANDING

PERCENT TO BE REPURCHASED

LEVERED FIRM

BORROWING

ANNUAL RATE

ANNUAL INTEREST

SHARES OUTSTANDING

IS THE BREAK$-$EVEN EBIT $("$YES$"$ OR $"$NO$")?$:

EPS AT BREAK$-$EVEN EBIT

UNLEVERED

LEVERED

EPS AT EBIT OF $$1,800,000$

UNLEVERED

LEVERED

EPS AT EBIT OF $$1,000,000$

UNLEVERED

LEVERED