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Please answer it carefully with proper explanition. The LP company has $ 1 0 million in assets, 8 0 % financed by debt and 2

Please answer it carefully with proper explanition.
The LP company has $10 million in assets, 80% financed by debt and 20% financed by common stock. The interest rate on the debt is 15%, and the stock book value is $10 per share. LP is considering two financing plans for an expansion to $15 million in assets. Under plan A, the debt-to-total-asset ratio will be maintained, but new debt will cost 18%. New common stock will be sold at $10 per share. Under plan B, only new common stock at $10 per share will be issued. The tax rate is 40%.
a. Calculate the EBIT/EPS indifference point.
b. If EBIT is expected to be 15% of total assets, compute the EPS under the two expansion alternatives?
c. Would you have expected the results you get in part b from your calculation of EBIT indifference in part a? Briefly explain.
d. Instead of Plan B (raising new financing with common shares), if the company decided they should raise only half the amount needed by issuing common shares at $10 each and finance the remainder of the project with 4% preferred shares, what would the indifference point be?
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