An all-equity plan would result in 18000 shares of stock


Haskell Corp. is comparing two different capital structures. Plan I would result in 13,000 shares of stock and $100,000 in debt. Plan II would result in 10,500 shares of stock and $150,000 in debt. The interest rate on the debt is 10 percent. Assume that EBIT will be $90,000. An all-equity plan would result in 18,000 shares of stock outstanding. Ignore taxes. What is the price per share of equity under Plan I? Plan II?

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Financial Management: An all-equity plan would result in 18000 shares of stock
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