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15-13 (EBIT-EPS amalhsit) A group of retired university professors has decided to form a small manufacturing company to produce a range of traditional office furniture.

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15-13 (EBIT-EPS amalhsit) A group of retired university professors has decided to form a small manufacturing company to produce a range of traditional office furniture. Two financing plans have been proposed by the investors. Plan A is an all-ordinary-share alternative, where 5 million shares will be sold to net the firm St per share. Plan B involves the use of financial leverage. A debt issue with a 20-year maturity period will be privately placed. The debt issue will carry an interest rate of 10%, and the principal borrowed will amount to $6 million. The corporate tax rate is 50%. () Prepare an EBIT-EPS analysis chart for this company (b) Find the EBIT indifference level associated with the two financing proposals. (e If a detiled financial analysis projects that long-torm EBFT will always 52.4 milion annually, which plan will provide for the hicher EPS2

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