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What is the break-even EBIT

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Reference no: EM132992346

Question - Yasmin S.A. commissioned him to carry out an analysis of two different capital structures, Plan I only equity (all equity) and Plan II with leverage (Levered). Under Plan I the company will have 170,000 shares outstanding. Under Plan II, the company will have 120,000 outstanding shares and a Debt value of 1.57 billion. The cost of debt is 8% and the tax rate is 35%.

If EBIT is $ 290,000 which plan will result in the highest EPS

If EBIT is $ 690,000, which plan will result in the highest EPS

What is the break-even EBIT?

Reference no: EM132992346

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