Bernardin inc is considering two capital stnictures the key, Ask an Expert

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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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Category:- Basic Finance
Reference No.:- M9750129

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