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Honeycutt Co. is comparing two different capital structures. Plan I would result in 12,700 shares of stock and $109,250 in debt. Plan II would result
Honeycutt Co. is comparing two different capital structures. Plan I would result in 12,700 shares of stock and $109,250 in debt. Plan II would result in 9,800 shares of stock and $247,000 in debt. The interest rate on the debt is 10 percent. a. b. C. What the break-even level of EBIT for Plan I as compared to Plan II? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) d-1. Assuming the corporate tax rate is 21 percent, what is the EPS for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) d-2. Assuming the corporate tax rate is 21 percent, what is the break-even level of EBIT for Plan I as compared to that for an all-equity plan? What about for Plan II as compared to the all-equity plan? (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) d-3. Assuming the corporate tax rate is 21 percent, what is the break-even level of EBIT for Plan I as compared to Plan II? (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) a. If the EBIT is $79,000, what is the EPS for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) What is the break-even level of EBIT for Plan I as compared to that for an all-equity plan? What about for Plan II as compared to the all-equity plan? (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) b. C. d-2. Plan I EPS Plan II EPS All-equity plan EPS Plan I and all-equity break-even EBIT Plan II and all-equity break-even EBIT Plan I and Plan II break-even EBIT d-1. Plan I EPS Plan II EPS All-equity plan EPS Plan I and all-equity break-even EBIT Plan II and all-equity break-even EBIT d-3. Plan I and Plan II break-even EBIT
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