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Answer the following questions based on the information provided in the table Plan 1 Plan 2 Interest Expense 30,000 55000 Preferred dividends 2,000 4,000 Common
Answer the following questions based on the information provided in the table
| Plan 1 | Plan 2 | |
| Interest Expense | 30,000 | 55000 |
| Preferred dividends | 2,000 | 4,000 |
| Common shares outstanding | 150,000 | 150,000 |
- What is the degree of financial leverage at a base level EBIT of $120,000 for both financing plans? The firm has a 40 percent tax rate.
- What is the EPS for both Financing Plan 1 and Plan 2, if the firm projects EBIT of $250,000 and has a tax rate of 40 percent?
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Venture Capital And The Finance Of Innovation
Authors: Andrew Metrick, Ayako Yasuda
3rd Edition
1119490111, 978-1119490111
