question 5 and 6

Question 5 (2 points) Honeycutt Co. is considering a new capital structure. This plan would result in 4,000 shares of stock and $100,000 in debt. The interest rate on the debt is 10 percent with a 20% corporate tax rate. What is the EPS for this plan if projected EBIT is $50,000? Cannot be determined from given facts $10 $9 $8 Question 6 (2 points) BC Corp. has 10 million shares of common stock outstanding with a current share price of $10 and a book value of $7 per share. The company also has one bond issue outstanding. This bond issue has a face value of $100 million, a coupon rate of 7 percent, sells for 110 percent of par, and matures in 20 years. This bond makes semiannual coupon payments. What is the company's market value debt/equity ratio