c. Repeat parts (a) and (b) of this problem assuming the firm has a tax rate of 35 percent. . Break-Even EBIT [LO1] DAR is comparing two different capital structures: an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 195,000 shares of stock outstanding. Under Plan II, there would be 140,000 shares of stock outstanding and $1,787,500 in debt outstanding. The interest rate on the debt is 8 percent, and there are no taxes. a. If EBIT is $400,000, which plan will result in the higher EPS? b. If EBIT is $600,000, which plan will result in the higher EPS? c. What is the break-even EBIT? 5. M&M and Stock Value [LO1] In Problem 4, 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