Problem:
Raise 1 Billion for expansion. Need to determine whether to use all debt, all stock or 50-50 combination. I have a 38% tax rate, 5% interest rate, stock price of $50 per share, annual dividentd of $.30 per share common stock. The EBIT range is 6.332 billion and 9 billion. There is a total of 1 billion shares of common stock outstanding. Develop an EPS/EBIT chart to reflect analysis.