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Venus Corp. is comparing two (2) different capital structures: Plan 1 - all equity plan Plan 2 - a leveraged plan (debt/equity). Under plan 1,

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Venus Corp. is comparing two (2) different capital structures: Plan 1 - all equity plan Plan 2 - a leveraged plan (debt/equity). Under plan 1, Venus Corp. would have 265,000 shares of stock outstanding. Under plan 2, Venus Corp. there would be 185 000 shares of stock outstanding and $2.8 million in debt outstanding. The interest rate on the debt is 10% (no taxes). (include calculations for full marks) Required: a) (5 marks) If EBIT is $750 000, which plan will result in the higher EPS? b) (5 marks) If EBIT is $1,500,000, which plan will result in the higher EPS? c) (10 marks) What is the break-even EBIT between the two capital structures? (Hint: Complete indifference analysis

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