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2- Rise Against Corporation is comparing two different capital structures: an all equity plan (Plan A)...

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Finance

2- Rise Against Corporation is comparing two different capitalstructures: an all equity plan (Plan A) and a levered plan (PlanB). Under Plan A, the company would have 210,000 shares of stockoutstanding. Under Plan B, there would be 150,000 shares of stockoutstanding and $2.28 million in debt outstanding. The interestrate on the debt is 8%, and there are no taxes. a- What is thebreak-even EBIT? b- What is the price per share of equity? c- Whatis the value of the firm?

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2- Rise Against Corporation is comparing two different capitalstructures: an all equity plan (Plan A) and a levered plan (PlanB). Under Plan A, the company would have 210,000 shares of stockoutstanding. Under Plan B, there would be 150,000 shares of stockoutstanding and $2.28 million in debt outstanding. The interestrate on the debt is 8%, and there are no taxes. a- What is thebreak-even EBIT? b- What is the price per share of equity? c- Whatis the value of the firm?

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