EPS indifference Problem
Taiwan Imports is examining the financial implications of expanding its productive capacity with an $800,000 investment. The company's financial manager has determined that the company now has 80,000 shares outstanding and to finance the project with new equity requires an additional 20,000 shares. Alternatively, to finance it with debt requires $800,000 of 12 percent bonds. The company is in the 40 percent marginal tax bracket.
Here's the question: What is earnings per share based on the EBIT-EPS indifference EBIT* amount solved for in the question above? Nearest
I do not even know where to get started on this problem. Any explanation would be appreciated. Thank you