What is the number of shares under each plan

Reference no: EM13267756

Ace had 10 million in assets. It is consider a 40 percent debt/asset ratio vs. its current 20 percent debt/asset ratio. Debt arriews interest charges of 12 percent and shares sell for $20 per share.

a) What is the number of shares under each plan?

b) Assuming a 40 percent tax rate, find the level of EBIT at which both plans will have the same EPS? (Show work and formulas)

Reference no: EM13267756

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