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P16-4 Break-Even EBIT (LO1] James Corporation is comparing two different capital structures: an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan
P16-4 Break-Even EBIT (LO1] James 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 129,000 shares of stock outstanding. Under Plan II, there would be 51,600 shares of stock outstanding and $1.29 million in debt outstanding. The interest rate on the debt is 10 percent, and there are no taxes. Required: (a)lf EBIT is $172,000, Plan I's EPS is $ while Plan Il's EPS is $ ]. (Do not include the dollar signs ($). Round your answers to 2 decimal places. (e.g., 32.16)) (b)lf EBIT is $581,000, Plan I's EPS is $ and Plan Il's EPS is $ 1. (Do not include the dollar signs ($). Round your answers to 2 decimal places. (e.g., 32.16)) (c)The break-even EBIT is $ ]. (Do not include the dollar sign ($). Round your answer to the nearest whole dollar amount. (e.g., 32))
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