Frankline Coin,Inc.is considering two capital structures.The key information follows.Assume a 40 percent tax rate and expected EBIT of $50,000. (a)Calculate two EBIT-EPS coordinates for each of the structures.
(b)Indicate over what EBIT range,if any,each structure is preferred.

Question

Frankline Coin,Inc.is considering two capital structures.The key information follows.Assume a 40 percent tax rate and expected EBIT of $50,000.  (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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The Answer of Frankline Coin,Inc.is considering two capital structures.The key information follows.Assume a 40 percent tax rate and expected EBIT of $50,000.  (a)Calculate two EBIT-EPS coordinates for each of the structures.
(b)Indicate over what EBIT range,if any,each structure is preferred.