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2020 Parker Brothers, Inc, is considering the following three financing plans: Plan A Plan B Plan C Common Stock: $200,000 Bond at 8%: $100,000 Preferred

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2020 Parker Brothers, Inc, is considering the following three financing plans: Plan A Plan B Plan C Common Stock: $200,000 Bond at 8%: $100,000 Preferred Stock at 8%: $100,000 Common Stock: $100,000 Common Stock: $100,000 In each case the common stock will be sold at $ 20 per share. The expected EBIT is $80,000 and tax rate is 50 percent. Determine EPS and financial breakeven point for each plan. Draw EBIT-EPS graph and indicate over what EBIT range each plan is preferred. (14)

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