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please explain the math on part C.. it's difficult to understand on other posts pait(a) assuming the firm goes through with the proposed recapitalization c.
please explain the math on part C.. it's difficult to understand on other posts
pait(a) assuming the firm goes through with the proposed recapitalization c. Repeat parts (a) and (b) of this problem assuming the firm has a tax rate of 35 percent LO1 4. Break-Even EBIT. Kyle 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 300,000 shares of stock outstanding. Under Plan II, there would be 210,000 shares of stock outstanding and $2.367.000 in debt outstanding. The interest rate on the debt is 10 percent and there are no taxes a. If EBIT is 5600,000, which plan will result in the higher EPS? b. If EBIT is $900,000, which plan will result in the higher EPS? c. What is the break-even EBITStep by Step Solution
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