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**Finance homework question. Cannot copy so screen shot pasted below, several small parts. Thanks! Do Homework Michael Bonincontri Internet Explorer P http 588458&questionld-1&flushed false&cld 3675779¢
**Finance homework question. Cannot copy so screen shot pasted below, several small parts. Thanks!
Do Homework Michael Bonincontri Internet Explorer P http 588458&questionld-1&flushed false&cld 3675779¢ yer Check-y Michael Bonincontri 2/21/16 3:39 PM Homework: Assignment 6 Overview P13-22 (similar to Exercise Score: 0 of 10 pts Assignment Score: 10% (10 of 100 pts) 3 of 10 complete EBIT-EPS and capital structure Data-Check is considering two capital structures. The key information is shown in the following table. Assume a 40% tax rate. IE Source of capital Structure A Structure B Long-term debt S97,000 at 15.1% coupon rate S194,000 at 16.1% coupon rate Common stock 5,000 shares 2,500 shares a. Calculate two EBIT-EPS coordinates for each of the structures by selecting any two EBIT values and finding their associated EPS values. BE b. Plot the two capital structures on a set of EBIT-EPS axes. c. Indicate over what EBIT range, if any, each structure is preferred. d. Discuss the leverage and risk aspects of each structure. e. If the firm is fairly certain that its EBIT will exceed $71,000, which structure would you recommend? Why? Complete the tables below using $50,000 and $60,000 EBIT: (Round to the nearest dollar. Round the EPS to the nearest cent.O Structure A EBIT 50,000 Less: Interest Net profits before taxes S Less: Taxes Net profit after taxes EPS (5,000 shares Enter any number in the edit fields, then click Check Answer 9 parts remaining Clear All Check Answer Save 2:40 PM Finance f Untitled Do Hom inance 2/21/2016Step by Step Solution
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