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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 7,800 shares of stock and $247,000 in debt. The interest rate on the debt is 10 percent. All plans would start with EBIT of $79,000. The all-equity plan would result in 15,000 shares of stock outstanding. Ignore taxes for this problem. What is the Plan I EPS? What is the Plan II EPS? What is the All-Equity Plan EPS? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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