Bernardin Inc. is considering two capital stnictures. The key information follows. Assume a 40 percent tax rate arid expected EBIT of $50,000.
Source of Capital Structure 1 Structure 2
Long-terrrt debt S500,C30 0% 535Ci.000
Cornrnon .ock 10.0CC shares 23,000 shares
(a) Calculate two EBIT-EPS coordinates for each of the structures.
(b) Indicate over what EBIT range, if any, each structure is preferred
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