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Suppose a company needs to raise $5 million for a venture project and the company can borrow money from a bank and pay 7% interest each year, or raise money by issuing new equity. After consulting a potential underwriter, the company could issue one million common shares at $5 per share. For simplicity, let's assume no underwriting fee. Below is the income statement forecasted by the company. a) What would be the company's earnings per share if the company take the bank loan or issue common shares? b) Determine the break-even EBIT between the two financing options. If the company's projected EBIT in 2021 is of $3,600,000, is it beneficial to increase leverage? Suppose a company needs to raise $5 million for a venture project and the company can borrow money from a bank and pay 7% interest each year, or raise money by issuing new equity. After consulting a potential underwriter, the company could issue one million common shares at $5 per share. For simplicity, let's assume no underwriting fee. Below is the income statement forecasted by the company. a) What would be the company's earnings per share if the company take the bank loan or issue common shares? b) Determine the break-even EBIT between the two financing options. If the company's projected EBIT in 2021 is of $3,600,000, is it beneficial to increase leverage

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