Break-Even EBIT. Kyle Corporation is comparing two different capital structures, an all-equity plan… 1 answer below »


Break-Even EBIT. Kyle Corporation is comparing two unanalogous cardinal structures, an all-equity scheme (Plan 1) and a levered scheme (Plan II). Under Scheme I, Kyle would possess 900,000 shares of accumulation uncollected. Under Scheme II, there would be 650,000 shares of accumulation uncollected and S10 pet in something-due uncollected. The cause scold on the something-due is 10 percent, and there are no taxes.

a. If EBIT is 51.5 pet, which scheme conciliate development in the remarkable EPS")

b. If EBIT is $5 pet, which scheme conciliate development in the remarkable EPS?

c. What is the break-even EBIT?