EPS, Debt$-$to$-$Equity, Breakeven point LexMart maintains a debt$-$to$-$equity

ratio of $1\mathrm{.}0$ regardless of whether the firm experiences expansion or

contraction. At the present time, LexMart has $$1,000$ par value bonds

outstanding that pay $9\%$ annual interest. The firm also has $2\mathrm{.}6$ million shares

of common stock outstanding that sells for $$18$ per share.

a$.$ Based on LexMart's current annual NOP of $$25,000,000$ and its corporate

tax rate of $20\%,$ what is its EPS?

b$.$ If LexMart would like to finance a $$60$ million expansion while

maintaining it's current debt$-$to$-$equity ratio of $1\mathrm{.}0,$ how many bonds at $$1,000$

per bond and shares of stock will it have to sell to pay for the expansion?

c$.$ After the expansion, what level of annual NOP will LexMart have to

generate to maintain its current level of EPS?