Use the ebit-eps analysis to evaluate the two plans

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This part of the project is to analyze the following capital structure plans. You will use the EBIT-EPS analysis to evaluate the two plans. One plan is all equity and one has debt and equity.
Plan Plan 1: All Equity
Plan 2:
Some Debt Shares of Equity 80,000 50,000 Debt 0 $2,000,000 Cost of debt 0 12% Interest Expense 0 $240,000 Tax Rate 34% 34% Determine the EBIT indifference point Discuss the implications of EBIT above and below this point.

Reference no: EM13288706

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