CASE 3 (20 points) A company is comparing three different capital structures: Plan I would result in 15,000 shares of stock outstanding (all-equity plan). Plan II would result in 12,000 shares of stock and 100,000 in debt. Plan II would result in 8,000 shares of stock and 200,000 in debt. The interest rate on the debt is 10 percent. A company expects to earn EBIT C95,000. ignore taxes. Instructions: 1. Calculate EPS for each plan. (15 points) 2. Which plan do you recommend to the company? Explain the effect of financial leverage (5 points) CASE 4 (20 points) The stockholders' equity accounts for a corporation are shown here: Common stock (63 par value) 90,000 Capital surplus 300,000 Retained earnings 510,000 Total stockholders' equity 900,000 Instructions: 1. If the company's stock currently sells for 634 per share and a 15 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change. (10 points) 2. If the company declares a three-for-two stock split, how the equity accounts will change? How many shares are outstanding now? What is the new par value per share? (10 points)