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Problem 2.16 Great West Corp. is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I

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Problem 2.16 Great West Corp. is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I Great West would have 135,000 shares of stock outstanding. Under Plan II, there would be 90,000 shares of stock outstanding and $1.350 million in debt outstanding. The interest rate on the debt is 10.00 percent and there are no taxes If EBIT is $243,000, what are the EPS estimates for the two plans? IEBIT is $1,134,000, what are the EPS estimates for the two plans? c. What is the break-even EBITY Type here to search o 3 O e DIL Home End % 5 & 7 2 6 8 9 1/

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