Consider two companies in a world with no taxes that are alike except in borrowing choices. District Corp. has no debt financing, and Energy Corp. uses debt financing. The EBIT for both companies is $3,500,000. District Corp. has 400,000 shares outstanding and pays no interest. Energy Corp. has 250,000 shares outstanding and pays $500,000 in interest. What is the EPS for each company? Both companies have an EPS of $8.75. Both companies have an EPS of $12.00. District Corp. has an EPS of $12.00 and Energy Corp. has an EPS of $8.75. District Corp. has an EPS of $8.75 and Energy Corp. has an EPS of $12.00.