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11- Find the EBIT breakeven point using the information below: Plan A: Plan B: $42 million in debt $62 million in debt 5.25% interest rate

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11- Find the EBIT breakeven point using the information below: Plan A: Plan B: $42 million in debt $62 million in debt 5.25% interest rate 6.75% interest rate $80 million in equity $60 million in equity 2 million shares of equity 1.5 million shares of equity Tax rate under both plans: 32% (Break-even EBIT=10,125,000) 12- A certain firm has 21,000 bonds outstanding with a par value of $1,000 each and a coupon rate of 7%. If interest is paid annually, and the firm has a tax rate of 35%, what is the annual interest tax shield? (514,500)

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