Break$-$even EBIT$($with and without $$taxes$).$ Alpha Company is looking at two different capital$$ structures, one an$$ all$-$equity firm and the other a levered firm with $$$$3\mathrm{.}36$ million of debt financing at $7\%$ interest. The$$ all$-$equity firm will have a value of $$$$8\mathrm{.}4$ million and $420000$ shares outstanding. The levered firm will have $252000$shares outstanding.

a$.$Find the$$ break$-$even EBIT for Alpha Company using EPS if there are no corporate taxes.

b$.$Find the$$ break$-$even EBIT for Alpha Company using EPS if the corporate tax rate is $25\%.$

c$.$What do you notice about these two$$ break$-$even EBITs for Alpha$$ Company?

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