1. An all-equity company's EBIT is expected to be the same amount every year forever. The company is currently valued at $34,000,000. The company's cost of debt is 4.75% and its cost of equity is 11.5%. The company is considering borrowing $8,500,000, which would be used to buy back shares. Assume all the M&M assumptions are satisfied and all available earnings are immediately distributed to common shareholders. According to the M&M Propositions without taxes, what is EBIT for this company?

round final answer to 2 decimals