Rolston Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, Rolston would have 190,000 shares of stock outstanding. Under Plan II, there would be 140,000 shares of stock outstanding and $2.80 million in debt outstanding. The interest rate on the debt is 6 percent and there are no taxes.

If EBIT is $275,000, what is the EPS for each plan?

If EBIT is $525,000, what is the EPS for each plan?

What is the break-even EBIT?