Answer \#2 only!!! 1. Round Hammer ss comparing two di 'erent capital structures: An Ill-equity pla (Plan I and a levered plan (Plan II). Und r Plan I, the ompany yould have 180,000 shares of stoc outstanding Under Pl n II, there would be 130,000 shar s of stock out tanding a d S1.925 million in debt outstand ng. The inter st rate on he debt is 8%, and there are no ixes. a. If EBIT is $400,000, whi h plan wi I result in the higher EPS? b. If EBIT is $600,000, which plan w I result in the higher EPS? c. What is the break-even EBIT? 2. In Problem 1, use M \& M Proposition I to find the price per share of equity under each of the two proposed plans. What is the value of the firm