What is the break-even ebit

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Rise Against Corporation is comparing two different capital structures: an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 195,000 shares of stock outstanding. Under Plan II, there would be 145,000 shares of stock outstanding and $2.90 million in debt outstanding. The interest rate on the debt is 7 percent, and there are no taxes. a. If EBIT is $475,000, what is the EPS for each plan? (Round your answers to 2 decimal places.(e.g., 32.16)) EPS Plan I $ Plan II $ b. If EBIT is $725,000, what is the EPS for each plan? (Round your 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, i.e. 1,234,567.)

Reference no: EM13260217

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