Consider Two Firms That Are Identical in Every Way Except

Consider two firms that are identical in every way except that one has $15,000 of debt and 500 shares of stock outstanding,while the other is all-equity and has 650 shares of stock outstanding.Assume that the debt is a perpetuity with annual coupons at the rate of 6%.What is each firms' earnings per share if EBIT is $7,500? Assume a tax rate of 40%.

A) EPS_L = 7.92; EPS_E = 7.92
B) EPS_L = 6.92; EPS_E = 7.92
C) EPS_L = 6.92; EPS_E = 6.92
D) EPS_L = 7.92; EPS_E = 6.92
E) EPS_L = 8.92; EPS_E = 6.92