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Seri's Choice is a cosmetic company that is currently considering the use of debt in its capital structure, departing from its current condition where it

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Seri's Choice is a cosmetic company that is currently considering the use of debt in its capital structure, departing from its current condition where it uses solely equity. Under the current capital structure, i.e., the all-equity plan, the number of stock outstanding is 17,000,000. The second capital structure option (Plan A) will result in 6,500,000 shares outstanding and IDR 403,200,000 of debt. Meanwhile, the other option involves 14,500,000 shares outstanding and IDR 96,000,000 of debt (Plan B). For the debt, the interest rate would be 15%. a. Without incorporating tax in the calculation, compare these three capital structure options of Seri's Choice, if the company's targeted EBIT is IDR 252,000,000, in terms of EPS and ROE. Use graphs where the horizontal axis is the EBIT and the vertical axis is the EPS/ROE in explaining your answer. Which option results in the highest EPS and ROE? b. Calculate the break-even levels of EBIT of the three options of capital structure for Seri's Choice. Since there are three options, calculate the all-equity plan vs plan A, all-equity vs plan B, and plan A vs plan B. Seri's Choice is a cosmetic company that is currently considering the use of debt in its capital structure, departing from its current condition where it uses solely equity. Under the current capital structure, i.e., the all-equity plan, the number of stock outstanding is 17,000,000. The second capital structure option (Plan A) will result in 6,500,000 shares outstanding and IDR 403,200,000 of debt. Meanwhile, the other option involves 14,500,000 shares outstanding and IDR 96,000,000 of debt (Plan B). For the debt, the interest rate would be 15%. a. Without incorporating tax in the calculation, compare these three capital structure options of Seri's Choice, if the company's targeted EBIT is IDR 252,000,000, in terms of EPS and ROE. Use graphs where the horizontal axis is the EBIT and the vertical axis is the EPS/ROE in explaining your answer. Which option results in the highest EPS and ROE? b. Calculate the break-even levels of EBIT of the three options of capital structure for Seri's Choice. Since there are three options, calculate the all-equity plan vs plan A, all-equity vs plan B, and plan A vs plan B

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