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2 . Nova Corp. is considering different capital structures. Option A would result in 1 3 , 0 0 0 shares of stock and $
Nova Corp. is considering different capital structures. Option A would result in
shares of stock and $ in debt. Option B would result in share of stock
and $ in debt. Option C would be an all equity plan of shares. The
interest rate on the debt is There is also no tax. points
a Assuming an EBIT of $ which of the three options would yield the highest
EPS?
b What are the breakeven levels of EBTIT for Option A and B as compared to that
of all equity Option C Is one higher than the other? Why?
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