Hale Corporation is comparing two different capital structures,an all-equity plan (Plan I) and a levered plan (Plan II). UnderPlan I, the company would have 190,000 shares of stock outstanding.Under Plan II, there would be 140,000 shares of stock outstandingand $2.8 million in debt outstanding. The interest rate on the debtis 6 percent and there are no taxes. If EBIT is $275,000, what isthe EPS for each plan? (Do not round intermediate calculations andround your answers to 2 decimal places, e.g., 32.16.) If EBIT is$525,000, what is the EPS for each plan? (Do not round intermediatecalculations and round your answers to 2 decimal places, e.g.,32.16.) What is the break-even EBIT? (Do not round intermediatecalculations and round your answers to 2 decimal places, e.g.,32.16.)
