Plan A is an all-common-equity structure in which $2.1 milliondollars would be r

Plan A is an all-common-equity structure in which $2.1 milliondollars would be raised by selling common stock at $20 pershare.Plan B would involve the use of financial leverage. $1.1 milliondollars would be raise by selling bonds with an effective interestrate of 10.7%(per annum) and the remaining $1.0 million would beraised by selling common stock at $20 per share. The financialleverage is considered to be a permanent part of the firmscapitalization so no fixed maturity date is needed for theanalysis. A 35% tax rate is deemed appropriate for theanalysis.(A) Find the EBIT indifference level associated with the twofinancing plans. (Round to the nearest dollar.)(B) A detailed financial analysis of the prospects suggests thatthe long term EBIT will be above 344000 annually. Taking this intoconsideration which plan will generate the higher EPS?