# Calculating EPS at different levels of EBIT

Not what you're looking for?

Rise Against Corporation 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 195,000 shares of stock outstanding. Under Plan II, there would be 145,000 shares of stock outstanding and $2.10 million in debt outstanding. The interest rate on the debt is 8 percent, and there are no taxes.

1. If EBIT (earnings before interest and taxes) is $550,000, what is the EPS (earnings per share) for each plan?

2. If EBIT is $800,000, what is the EPS for each plan?

3. What is the break-even EBIT?

##### Purchase this Solution

##### Solution Summary

Solution depicts the steps to calculate EPS at different levels of EBIT. It also determines the break-even level of EBIT.

###### Education

- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India

###### Recent Feedback

- "Thank you"
- "Really great step by step solution"
- "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
- "Thanks Again! This is totally a great service!"
- "Thank you so much for your help!"

##### Purchase this Solution

##### Free BrainMass Quizzes

##### Graphs and Functions

This quiz helps you easily identify a function and test your understanding of ranges, domains , function inverses and transformations.

##### Solving quadratic inequalities

This quiz test you on how well you are familiar with solving quadratic inequalities.

##### Geometry - Real Life Application Problems

Understanding of how geometry applies to in real-world contexts

##### Know Your Linear Equations

Each question is a choice-summary multiple choice question that will present you with a linear equation and then make 4 statements about that equation. You must determine which of the 4 statements are true (if any) in regards to the equation.

##### Multiplying Complex Numbers

This is a short quiz to check your understanding of multiplication of complex numbers in rectangular form.