B D E F G H 1 J K L M N. Chapter 16 - Dropbox 4.4 Problem 2: Break-Even EBIT and Leverage Haskell Corp. is comparing three different capital structures. Plan 1 would result in 13,000 shares of stock and $130,500 in debt. Plan 2 would result in 10,400 shares of stock and $243,600 in debt. Plan 3 is an all- equity (no debt) plan and would result in 16,000 shares of stock outstanding. The interest rate on the debt is 10 percent. EBIT will be $56,000 in all scenarios. a) Ignoring taxes, compare the three plans. Which of the three plans would result in the highest Earnings per Share (EPS)? Which results in the lowest EPS? b) In part (a), what are the break-even levels of EBIT for each plan? Is one higher than the other? Why or why not? c) Ignoring taxes, when will EPS be identical for Plans 1 and 2? d) Repeat parts (a), (b), and (c) assuming that the corporate tax rate is 40 percent. Are the break-even levels of EBIT different than before? Why or why not? Use the Template Provided Below to Create Your Solution - Pay close attention to the formulas and formatting of the inputs. B D E F G H 1 J K L M N. Chapter 16 - Dropbox 4.4 Problem 2: Break-Even EBIT and Leverage Haskell Corp. is comparing three different capital structures. Plan 1 would result in 13,000 shares of stock and $130,500 in debt. Plan 2 would result in 10,400 shares of stock and $243,600 in debt. Plan 3 is an all- equity (no debt) plan and would result in 16,000 shares of stock outstanding. The interest rate on the debt is 10 percent. EBIT will be $56,000 in all scenarios. a) Ignoring taxes, compare the three plans. Which of the three plans would result in the highest Earnings per Share (EPS)? Which results in the lowest EPS? b) In part (a), what are the break-even levels of EBIT for each plan? Is one higher than the other? Why or why not? c) Ignoring taxes, when will EPS be identical for Plans 1 and 2? d) Repeat parts (a), (b), and (c) assuming that the corporate tax rate is 40 percent. Are the break-even levels of EBIT different than before? Why or why not? Use the Template Provided Below to Create Your Solution - Pay close attention to the formulas and formatting of the inputs