1. Consider two firms that are identical in every way except that one has $2,284.61 of debt and 595 shares of stock outstanding, while the other is all-equity and has 700 shares of stock outstanding Assume that the debt is a perpetuity with annual coupons at the rate of 9%. What is each firms earnings per share if EBIT is $3,300? Assume a tax rate of 40%. Leveraged Firm $3,300 All-Equity Firm $3,300 EBIT EPS What is the earnings per share (EPS) of the leveraged firm if EBIT is $3,300? $ (Round to the nearest cent.) What is the earnings per share (EPS) of the all-equity firm if EBIT is $3,300? (Round to the nearest cent.) Vapid Motors Inc. is considering a change to its capital structure. Selected financial information is provided in the table below. The current capital structure is shown in the column labeled 'Current'. Vapid is trying to choose between two financing alternatives. Under Option A, they will sell 451 new shares at the current price. Under Option B, they will borrow $469 at 8% and no new equity will be issued. There are currently 900 shares outstanding, and the firm is debt-free. The tax rate is 25%. What is the EBIT-EPS indifference point? Selected Financial Information Vapid Motors Inc. Current Option A Option B Debt $0 $0 $469 Interest $0 $0 $38 Tax Rate 25% 25% 25% Price $1.04 Shares Outstanding 900 1,351 900 n.a na. The EBIT-EPS indifference point is $ (Round to the nearest dollar.)