your firm is considering two financing plans. The key information follows: use a 40% tax rate Source...

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Finance

your firm is considering two financing plans. The keyinformation follows: use a 40% tax rate
Source of funds Plan A Plan B
Long term Dent $500 @ 6% $2,500 @ 10%
Preferred Stock 50 shares, $2 dividend per share 10 shares, $2 dividend per share
Common Stock 60 shares 15 shares
Draw the Earning Per Share and Earning Before Interest Tax linefor each plan on the same set axes. Over what range of Earningsbefore income tax would you prefer Plan A?
Show in excel if possible

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Please refer to below spreadsheet for calculation and answerCell See Answer

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your firm is considering two financing plans. The keyinformation follows: use a 40% tax rateSource of fundsPlan APlan BLong term Dent$500 @ 6%$2,500 @ 10%Preferred Stock50 shares, $2 dividend per share10 shares, $2 dividend per shareCommon Stock60 shares15 sharesDraw the Earning Per Share and Earning Before Interest Tax linefor each plan on the same set axes. Over what range of Earningsbefore income tax would you prefer Plan A?Show in excel if possible

Source of funds	Plan A	Plan B
Long term Dent	$500 @ 6%	$2,500 @ 10%
Preferred Stock	50 shares, $2 dividend per share	10 shares, $2 dividend per share
Common Stock	60 shares	15 shares