EBIT and EPS Suppose Blackhead plc has decided in favour of a capital restructuring that involves increasing its existing £80 million in debt to £125 million. The interest rate on the debt is 9 per cent, and is not expected to change. The firm currently has 10 million shares outstanding, and the share price is

£45. If the restructuring is expected to increase the ROE, what is the minimum level for EBIT that Blackhead’s management must be expecting? Ignore taxes in your answer.