Current Proposed Assets $6,000,000 $6,000,000 Debt Equity $500,000 $5,500,000 $1,000,000 $5,000,000 Debt/Equity 0.09 0.20 Ratio Share Price $15 $15 Shares 366,667 333,333 Outstanding Interest rate 10.8333% 10.8333% EBIT $1,000,000 $1,000,000 Interest $54,167 $108,333 Net Income $945,833 $891,667 ROE EPS 17.20% 17.83% $2.58 $2.68 (10 marks) Your firm is considering moving from the current capital structure to the proposed capital structure, replacing $500,000 in equity by increasing debt by $500,000, because with EBIT of $1,000,000 the EPS is greater ($2.68, instead of $2.58). a) What is the breakeven EBIT between the current and proposed capital structures? b) What is the EPS at the breakeven EBIT (rounded to two decimal places)? c) With EBIT above the breakeven amount, which of the capital structures would be preferred