EBIT-EPS and preferred stock Litho-Print is considering two possible capital structures, A and B, shown in the following table. Assume a 40% tax rate. Source of capital Structure A Structure B Long-term debt $78,000 at 15.3% coupon rate $53,000 at 14.3% coupon rate Preferred stock $12,000 with an annual dividend of 18.1% $17,000 with an annual dividend of 18.1% Common stock 8,100 shares 10,100 shares a. Calculate two EBIT-EPS coordinates for each of the structures by selecting any two EBIT values and finding their associated EPS values. b. Graph the two capital structures on the same set of EBIT-EPS axes. c. Discuss the leverage and risk associated with each of the structures. d. Over what range of EBIT is each structure preferred? e. Which structure do you recommend if the firm expects its EBIT to be greater than $40,000? Explain. EBIT-EPS and preferred stock Litho-Print is considering two possible capital structures, A and B, shown in the following table. Assume a 40% tax rate. Source of capital Structure A Structure B Long-term debt $78,000 at 15.3% coupon rate $53,000 at 14.3% coupon rate Preferred stock $12,000 with an annual dividend of 18.1% $17,000 with an annual dividend of 18.1% Common stock 8,100 shares 10,100 shares a. Calculate two EBIT-EPS coordinates for each of the structures by selecting any two EBIT values and finding their associated EPS values. b. Graph the two capital structures on the same set of EBIT-EPS axes. c. Discuss the leverage and risk associated with each of the structures. d. Over what range of EBIT is each structure preferred? e. Which structure do you recommend if the firm expects its EBIT to be greater than $40,000? Explain