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Kuchar Corporation is comparing two different capital structures, an all - equity plan ( Plan I ) and a levered plan ( Plan II )

Kuchar Corporation is comparing two different capital structures, an all-equity plan (Plan
I) and a levered plan (Plan II). Under Plan I, the company would have 180,000 shares of
stock outstanding. Under Plan II, there would be 130,000 shares of stock outstanding
and $2.6 million in debt outstanding. The interest rate on the debt is 8 percent and ther
are no taxes.
a. If EBIT is $575,000, what is the EPS for each plan? (Do not round intermediate
calculations and round your answers to 2 decimal places, e.g.,32.16.)
b. If EBIT is $825,000, 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 and enter
your answer in dollars, not millions of dollars, rounded to the nearest whole
number, e.g.,1,234,567.)
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