Coldstream Corp. is comparing two different capital structures. Plan I would result in 14,000 shares of stock and $100,000 in debt. Plan II would result in 10,800 shares of stock and $180,000 in debt. The interest rate on the debt is 8 percent.
a.	Ignoring taxes, compare both of these plans to an all-equity plan assuming that EBIT will be $90,000. The all-equity plan would result in 18,000 shares of stock outstanding. What is the EPS for each of these plans? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
b.	In part (a), what are the break-even levels of EBIT for each plan as compared to that for an all-equity plan? (Do not round intermediate calculations.)
c.	Ignoring taxes, at what level of EBIT will EPS be identical for Plans I and II? (Do not round intermediate calculations.)
d-1.	Assuming that the corporate tax rate is 23 percent, what is the EPS of the firm? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
d-2.	Assuming that the corporate tax rate is 23 percent, what are the break-even levels of EBIT for each plan as compared to that for an all-equity plan? (Do not round intermediate calculations.)
d-3.	Assuming that the corporate tax rate is 23 percent, at what level of EBIT will EPS be identical for Plans I and II? (Do not round intermediate calculations.)

Answer is not complete.

a.	Plan I EPS	$5.86selected answer correct
	Plan II EPS	$7.00selected answer correct
	All-equity EPS	$5.00selected answer correct
b.	Plan I and all-equity break-even EBIT	$36,000selected answer correct
	Plan II and all-equity break-even EBIT	$36,000selected answer correct
c.	Plan I and Plan II break-even EBIT	not attempted
d-1.	Plan I EPS	$3.51selected answer incorrect
	Plan II EPS	$4.20selected answer incorrect
	All-equity EPS	$3.00selected answer incorrect
d-2.	Plan I and all-equity break-even EBIT	$36,000selected answer correct
	Plan II and all-equity break-even EBIT	$36,000selected answer correct
d-3.	Plan I and Plan II break-even EBIT	$36,000selected answer correct