Consider two companies in a world with no taxes that are alike except in borrowing choices. Pacific Corp. has no debt​ financing, and Atlantic Corp. uses debt financing. The EBIT for both companies is​ $900. Pacific Corp. has 257 shares outstanding and pays no interest. Atlantic Corp. has 200 shares outstanding and pays​ $300 in interest. What is the EPS for each​ company? A. Pacific Corp. has an EPS of​ $3.00 and Atlantic Corp. has an EPS of​ $3.50. B.Pacific Corp. has an EPS of​ $3.50 and Atlantic Corp. has an EPS of​ $3.00. C. Both companies have an EPS of​ $3.50. D. Both companies have an EPS of​ $3.00.

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