High Sky Inc. a hot-air balloon manufacturing firm, currently has the following simplified balance sheet: Assets $800,000 Total assets $500,000 $200,000 Liabilities and Capital Bonds (9% interest) Common stock at par ($4), 50,000 shares outstanding Contributed capital in excess of par Retained earnings Total liabilities and capital $50,000 $50,000 $800,000 The company is planning an expansion that is expected to cost $600,000. The expansion can be financed with new equity (sold to net the company $6 per share) or with the sale of new bonds at an interest rate of 13 percent. (The firm's marginal tax rate is 40%.) Use Table V to answer the questions. Compute the indifference point between the two financing alternatives. Round your answer to the nearest dollar. $ If the expected level of EBIT for the firm is $250,000 with a standard deviation of $60,000, what is the probability that the debt financing alternative will produce higher earnings than the equity alternative? (EBIT is normally distributed.) Round your answer to two decimal places. 10.123% would be entered as 10.12 % If the debt alternative is chosen, what is the probability that the company will have negative earnings per share in any period? Round your answer to two decimal places. %