Destin corp is comparing three different capital structures. plan a would result in 10,000 shares of stock and $90,000 in debt. plan b would result in 7,600 shares of stock and $198,000 in debt. the all equity plan would result in 12,000 shares of stock outstanding. the interest rate on debt is 10%, and the ebit is $48,000. if destin corp has a tax rate of 40%, which of the three plans has the highest eps?

All equity plan (12,000 shares with an EPS of $2.40)

Explanation:

Plan A (10,000 shares):

interest = $90,000 x 10% = $9,000

net income = (ebit - interest) x (1 - 40%) = ($48,000 - $9,000) x 60% = $23,400

earnings per share (EPS) = $23,400 / 10,000 shares = $2.34 per share

Plan B (7,600 shares):

interest = $198,000 x 10% = $19,800

net income = (ebit - interest) x (1 - 40%) = ($48,000 - $19,800) x 60% = $16,920

earnings per share (EPS) = $16,920 / 7,600 shares = $2.23 per share

All equity plan (12,000 shares):

net income = ebit x (1 - 40%) = $48,000 x 60% = $28,800

earnings per share (EPS) = $28,800 / 12,000 shares = $2.40 per share

Explanation:

There is need to create  tabular forms in preparing the ledger of Hand Sanitizer for the year ended 31st March 2019. I've used the Microsoft word to create the table forms and it can be found in the document file attached below.

I hope that helps a lot!