What do you notice about these two? break-even

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Reference no: EM131308218

Break-even EBIT? (with and without taxes).

Alpha Company is looking at two different capital? structures, one an? all-equity firm and the other a levered firm with ?$2.88 million of debt financing at 8% interest.

The? all-equity firm will have a value of ?$7.2 million and 360,000 shares outstanding. The levered firm will have 216,000 shares outstanding.

a. Find the? break-even EBIT for Alpha Company using EPS if there are no corporate taxes.

b. Find the? break-even EBIT for Alpha Company using EPS if the corporate tax rate is 35%.

c. What do you notice about these two? break-even EBITs for Alpha? Company?

Reference no: EM131308218

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