1. Break even EBIT

2.Analytical income statement EPS

3.Graph EPS/EBIT

4. How to finance if EBIT =

- 1,000,000

- 2,000,000

In-class Problem . Plan A: sell 1,200,000 shares at $20 per share ($24 million total) . Plan B: issue $9.6 million in 9% debt and sell shares at $20 per share ($24 million total) Assume a 35% marginal tax rate