Business
Business, 23.12.2021 02:40, jsilsby

Trapper Corporation is comparing two different capital structures, an all-equity plan (Plan 1) and a levered plan (Plan II). Under Plan I, the company would have 200,000 shares of stock outstanding. Under Plan II, there would be 150,000 shares of stock outstanding and $2.2 million in debt outstanding. The interest rate on the debt is 5 percent, and there are no taxes. a. If EBIT is $350,000, what is the EPS for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places, e. g. 32.16.)
b. If EBIT is $600,000, what is the EPS for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places, e... 3216.)
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.)
a. Plan I EPS Plan II EPS
b. Plan I EPS Plan 11 EPS
c. Break-even EBIT

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