Let’s say Jet Blue Airlines needs to raise $1 billion to expand into new countries and cities. After completing the EPS/EBIT chart, determine whether Jet Blue should use all debt, all stock, or a 70% Stock-30% debt combination financing plan to implement this market-development strategy.
Assume the following:
Amount needed=$1 billion
Stock Price=$7.20 per share
EBIT Range is between $300 billion and $800 billion.
Common Stock Shares Outstanding=770 million
Develop an EPS/EBIT chart to reflect your analysis.
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