Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Kyle Corporation is comparing two different capital structures an allequity plan Plan I an...

Kyle Corporation is comparing two different capital structures an allequity plan Plan I and a levered plan Plan II Under Plan I Kyle would have 765000 shares of stock outstanding Under Plan

Kyle Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, Kyle would have 765,000 shares of stock outstanding. Under Plan II, there would be 515,000 shares of stock outstanding and $9.25 million in debt outstanding. The interest rate on the debt is 12 percent, and there are no taxes. Requirement 1: Assume that EBIT is $2.6 million. Compute the EPS for both Plan I and Plan II. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32 EPS

Plan I $

Plan II $

Requirement 2: Assume that EBIT is $3.1 million. Compute the EPS for both Plan I and Plan II. (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

EPS Plan I $

Plan II $

Requirement 3: What is the break-even EBIT? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).)

Break-even EBIT $

ireally need the break even IBT. no other expert has been able to explain this correctly

 

May 21 2020 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions