Storm Investing Ltd is forecasting an EBIT of $300,000 with a standard deviation of $60,000. They

currently have 400,000 shares on issue.

The company wants to raise $1,500,000 for expansion purposes, and is contemplating the following alternatives:

A. Raise $1 million from issuing shares at $1.25 and $500,000 from borrowings at 14%

B.Raising $1.5 million from borrowing at 14%

The company's tax rate is 30%.

.

Task:

What is?

a. The Earnings per Share (EPS) under each scenario?

b.The CV in the EPS under each scenario?