Cooke Company’s capital structure alternatives were plotted on the EBIT–EPS axes in Figure 12.6….


Cooke Company’s cardinal construction alternatives were plotted on the EBIT–EPS axes in Likeness 12.6. This likeness shows that each cardinal construction is eminent to the others in conditions of maximizing EPS balance indubitable ranges of EBIT. The zeroleverage cardinal construction (claim proportion= 0%) is eminent to either of the other capi

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tal constructions for flattens of EBIT among $0 and $50,000. Among $50,000 and $95,500 of EBIT, the cardinal construction associated after a while a claim proportion of 30% is preferred. And at a flatten of EBIT overhead $95,500, the 60% claim proportion cardinal construction provides the main rights per portion-out.22