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What is the ebit-eps indifference point

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Scott's company is looking at expanding into a new territory and needs to evaluate various financing plans. Below are the characteristics of each plan:

Plan A: Scott's company will sell 1,000,000 shares of common stock at a market price of $15 each

Plan B: Scott's company will sell $15,000,000 of long-term debt at a rate of 12%

Additional characteristics of Scott's company that you need to be aware of:

-Marginal tax rate of 35%

-Currently 10,000,000 shares of stock outstanding

What is the EBIT-EPS indifference point?

Reference no: EM132494806

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