3. In 2021, the company has a plan to raise 1,500 billion VND to expand the operation. The company is considering two scenarios (1) issue 150,000,000 common stocks with the par value of 10,000 VND; (2) issue bonds with a 10 percent annual coupon. Assume that current interest expense is unchanged from 2020. They expect annual EBIT to increase by 1060 billion VND. Corporate tax rate of 20 percent. 3.1. Calculate the EPS of each scenario. (0.5) 3.2. Calculate the EBIT-EPS indifference point and draw a graph of the EBIT-EPS indifference point. If the company’s goal is to maximize its EPS, which is financing scenario chosen? Why? (0.5) 3.3. According to the pecking order theory, in what order should the Company use its financing? Explain the reason. (1)
