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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.

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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 $2,500,000. District Corp. has 500,000 shares outstanding and pays no interest. Energy Corp. has 350,000 shares outstanding and pays $1,000,000 in interest. What is the EPS for each company? A. District Corp. has an EPS of $5.00 and Energy Corp. has an EPS of $4.29. B. Both companies have an EPS of $5.71. C. Both companies have an EPS of $5.00. D. District Corp. has an EPS of $5.71 and Energy Corp. has an EPS of $5.00

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