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Foundation, Incorporated, is comparing two different capital structures: an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would
Foundation, Incorporated, is comparing two different capital structures: an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 200,000 shares of stock outstanding. Under Plan II, there would be 150,000 shares of stock outstanding and \\( \\$ 3 \\) million in debt outstanding. The interest rate on the debt is 8 percent, and there are no taxes. a. If EBIT is \\( \\$ 675,000 \\), what is the EPS for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. If EBIT is \\( \\$ 925,000 \\), what is the EPS for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. What is the break-even EBIT? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) \\begin{tabular}{|l|l|} \\hline a. Plan I EPS \\\\ \\hline a. Plan II EPS & \\\\ \\hline b. Plan I EPS & \\\\ \\hline b. Plan II EPS \\\\ \\hline c. Break-even EBIT & \\\\ \\hline \\end{tabular}
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