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Alace is an all - equity firm with 1 0 million shares outstanding and is evaluating two alternative financing plans . With the first plan

Alaceisanall-equityfirmwith10millionsharesoutstandingandisevaluatingtwoalternativefinancingplans.Withthe firstplan,Alacewillsell1millionsharesofcommonstockat$15each.Underthesecondplan,thefirmwouldsell$15 millionof12%long-termdebt.IfAlacehasamarginaltaxrateof35%,whatistheEBIT-EPSindifferencepoint?

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