1. Grab Singapore is comparing two different capital structures: an unlevered firm (Plan A) and a levered firm (Plan B). Under Plan A, the company would have total 9 million USD worth assets. On the other hand, under Plan B, Grab wants to include debt their capital structure. There would be $3 million in debt outstanding. The interest rate on the debt is 15 percent. Currently Grab SGs shares are trading @ $30/share in the Singapore stock exchange. Assume theres no tax in either plan.

Required:

1. What is the break-even EBIT (EBIT/EPS Indifference point)?
2. Grab is expecting its EBIT to be roughly $180,000. Based on the break-even EBIT, should they go for plan B (incorporating debt)
3. If EBIT were $150,000, what would be the EPS and ROE under Plan A and Plan B?
4. If EBIT were $200,000, what would be the EPS and ROE under Plan A and Plan B?