10.12 Stars, Inc. is trying to decide how best to finance a proposed P10 million capital investment, Under Plan I, the project will be financed entirely with long-term 9% bonds. The firm currently has ne debt or preferred stock. Under Plan II, common stock will be sold at P20 a share; presently, 1 millior shares are outstanding. The corporate tax rate is 40%. Required: a. Calculate the indifference level of EBIT associated with the two financing plans. b. Which financing plan would you expect to cause the greatest change in EPS relative to a change in EBIT? Why? d. If EBIT is expected to be P3.1 million, which plan will result in a higher EPS