Suppose Scott, Inc. is currently unlevered, with 50 shares outstanding. It wants to finance a shopping center, which requires $18000 capital. The firm is considering two financing plans as shown below. Tax rate is 21%. Plan 1: 50% of debt at 16% and 50% Equity at $180/share Plan 2: 100% of Debt at 16% Please calculate the indifference EBIT and EPS.

Answer rating: 100% (QA)

Answer To solve this problem we need to calculate the indifference EBIT Earnings Before Interest and ... View the full answer