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Foundation, Incorporated, is comparing two different capital structures: an all-equity (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 I) and a levered plan (Plan II). Under Plan I, the company would have 145 shares of stock outstanding. Under Plan II, there would be 125,000 shares of outstanding and $716,000 in debt outstanding. The interest rate on the debt percent, and there are no taxes. a. If EBIT is $300,000, what is the EPS for each plan? (Do not round interme calculations and round your answers to 2 decimal places, e.g., 32.16.) b. If EBIT is $600,000, 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. Enter yo answer in dollars, not millions of dollars, e.g., 1,234,567.) es a. Plan I EPS a. Plan II EPS b. Plan I EPS b. Plan II EPS c. Break-even EBIT
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