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Yasmin Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, Yasmin would have

Yasmin Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, Yasmin would have 180,000 shares of stock outstanding. Under Plan II, there would be 130,000 shares of stock outstanding and $1.8 million in debt outstanding. The interest rate on the debt is 6 percent and there are no taxes.

a.

If EBIT is $225,000, what is the EPS for each plan? (Do not round intermediate calculations and round your final answers to 2 decimal places (e.g., 32.16).)

EPS
Plan I $
Plan II $
b.

If EBIT is $475,000, what is the EPS for each plan? (Do not round intermediate calculations and round your final answers to 2 decimal places (e.g., 32.16).)

EPS
Plan I $
Plan II $
c.

What is the break-even EBIT? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).)

Break-even EBIT $

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