i do not understand can you please help!Homework Answers
a)
b)
c)
Break even points are same for both, Hence it is observed that break even point does not change with tax rate.
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i do not understand can you please help!
Break-even EBIT (with and without taxes). Alpha Company...
Alpha Company is looking at two different capital structures, one an all-equity firm and the other...
Alpha Company is looking at two different capital structures, one an all-equity firm and the other a levered firm with $1.26 million of debt financing at 8% interest. The all-equity firm will have a value of $4.2 million and 420,000 shares outstanding. The levered firm will have 294,000 shares outstanding. a. Find the break-even EBIT for Alpha Company using EPS if there are no corporate taxes. a. What is the break-even EBIT for Alpha Company using EPS if there are...
Alpha Company is looking at two different capital structures, one an all-equity firm and the other...
Alpha Company is looking at two different capital structures, one an all-equity firm and the other a levered firm with $1.44 million of debt financing at 15% interest. The all-equity firm will have a value of $3.6 million and 360,000 shares outstanding. The levered firm will have 216,000 shares outstanding. a. Find the break-even EBIT for Alpha Company using EPS if there are no corporate taxes. a. What is the break-even EBIT for Alpha Company using EPS if there are...
Alpha Company is looking at two different capital structures, one an all-equity firm and the other...
Alpha Company is looking at two different capital structures, one an all-equity firm and the other a levered firm with $1.52 million of debt financing at 13% interest. The all-equity firm will have a value of $7 6 million and 380,000 shares outstanding. The levered firm will have 304,000 shares outstanding a. Find the break-even EBIT for Alpha Company using EPS if there are no corporate taxes a. What is the break-even EBIT for Alpha Company using EPS if there...
Alpha Company is looking at two different capital structures, one an all-equity firm and the other...
Alpha Company is looking at two different capital structures, one an all-equity firm and the other a levered firm with$3.52 million of debt financing at 8% interest. The all-equity firm will have a value of $8.8 million and 440,000 shares outstanding. The levered firm will have 264,000 shares outstanding. a.What is the break-even EBIT for Alpha Company using EPS if there are no corporate taxes? (Round to the nearest dollar.)
To solve the break even EBIT
4. Breakeven even EBIT James Corporationis comparing two different capital structures: an all equity plan (plan I) and levered plan (plan II). Under plan I , thecompany would have 160,000shares of stuck outstanding. Under plan (plan II), there is would be 80,000 shares of stock outstanding and $2.8 million in debt outstanding. The interest rate on thedebt is 8%,and there are no taxes.a. If EBIT is $ 350,000, which plan will result in the higher EPS?b. If EBIT is $...
Problem 16-4 Break-Even EBIT [LO1] Round Hammer is comparing two different capital structures: An all-equity plan...
Problem 16-4 Break-Even EBIT [LO1] Round Hammer is comparing two different capital structures: An all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 165,000 shares of stock outstanding. Under Plan II, there would be 115,000 shares of stock outstanding and $1.5 million in debt outstanding. The interest rate on the debt is 8 percent, and there are no taxes. a. If EBIT is $600,000, what is the EPS for each plan? (Do...
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B15-14 (book/static) Question Help (Using EBIT-EPS break-even analysis) Home Depot, Inc. (HD), had 1244 million shares...
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i need a b and c. Please write it by hand and explain. Thank you so...
i need a b and c. Please write it by hand and explain. Thank
you so much
LO 1 4. Break-Even EBIT. Kyle Corporation is comparing two different capital structures, an all-equity plan (Plan 1) and a levered plan (Plan II). Under Plan I, the company would have 300,000 shares of stock outstanding. Under Plan II, there would be 210,000 shares of stock outstanding and $2,367,000 in debt outstanding. The interest rate on the debt is 10 percent, and there...
Problem 13-6 Break-Even EBIT and Leverage [LO 1, 2] Silverton Co. is comparing two different capital...
Problem 13-6 Break-Even EBIT and Leverage [LO 1, 2] Silverton Co. is comparing two different capital structures. Plan I would result in 8,700 shares of stock and $323,000 in debt. Plan II would result in 12,000 shares of stock and $210,800 in debt. The interest rate on the debt is 10 percent. a. Ignoring taxes, compare both of these plans to an all-equity plan assuming that EBIT will be $53,100. The all-equity plan would result in 18,200 shares of stock...
Alpha Company is looking at two different capital structures, one an all-equity firm and the other a levered firm with $1.26 million of debt financing at 8% interest. The all-equity firm will have a value of $4.2 million and 420,000 shares outstanding. The levered firm will have 294,000 shares outstanding. a. Find the break-even EBIT for Alpha Company using EPS if there are no corporate taxes. a. What is the break-even EBIT for Alpha Company using EPS if there are...
Alpha Company is looking at two different capital structures, one an all-equity firm and the other a levered firm with $1.44 million of debt financing at 15% interest. The all-equity firm will have a value of $3.6 million and 360,000 shares outstanding. The levered firm will have 216,000 shares outstanding. a. Find the break-even EBIT for Alpha Company using EPS if there are no corporate taxes. a. What is the break-even EBIT for Alpha Company using EPS if there are...
Alpha Company is looking at two different capital structures, one an all-equity firm and the other a levered firm with $1.52 million of debt financing at 13% interest. The all-equity firm will have a value of $7 6 million and 380,000 shares outstanding. The levered firm will have 304,000 shares outstanding a. Find the break-even EBIT for Alpha Company using EPS if there are no corporate taxes a. What is the break-even EBIT for Alpha Company using EPS if there...
Break-Even EBIT and Leverage Coldstream Corp. is comparing two different capital structures. Plan I would result in 3,700 shares of stock and $13,700 in debt. Plan II would result in 3,100 shares of stock and $30,140 in debt. The interest rate on the debt is 7 percent. a. Ignoring taxes, compare both of these plans to an all-equity plan assuming that EBIT will be $7,600. The all-equity plan would result in 4,200 shares of stock outstanding. Which of the three...
B15-14 (book/static) Question Help (Using EBIT-EPS break-even analysis) Home Depot, Inc. (HD), had 1244 million shares of common stock outstanding in 2016, whereas Lowes Companies, Inc. (LOW), had 929 million shares outstanding. Assuming Home Depot's 2016 interest expense is $919 million, Lowes' interest expense is $552 million, and a 35 percent tax rate for both firms, what is their break-even level of operating income (i.e., the level of EBIT where EPS is the same for both firms)? The EBIT indifference...
i need a b and c. Please write it by hand and explain. Thank
you so much
LO 1 4. Break-Even EBIT. Kyle Corporation is comparing two different capital structures, an all-equity plan (Plan 1) and a levered plan (Plan II). Under Plan I, the company would have 300,000 shares of stock outstanding. Under Plan II, there would be 210,000 shares of stock outstanding and $2,367,000 in debt outstanding. The interest rate on the debt is 10 percent, and there...
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