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17. Tekken Industries is a company worth $12,000,000. The company is financed entirely by common stock: 480,000 shares at $25 per share. The company is

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17. Tekken Industries is a company worth $12,000,000. The company is financed entirely by common stock: 480,000 shares at $25 per share. The company is considering substituting debt for equity, buying back shares and issuing $3,000,000 of 3 percent debt. The tax rate is 35 %. What is the indifference point in EBIT at which the company will be indifferent in using financial leverage? a. $266,000 b. $305,455 c. $454,545 O d. $553,846 17. Tekken Industries is a company worth $12,000,000. The company is financed entirely by common stock: 480,000 shares at $25 per share. The company is considering substituting debt for equity, buying back shares and issuing $3,000,000 of 3 percent debt. The tax rate is 35 %. What is the indifference point in EBIT at which the company will be indifferent in using financial leverage? a. $266,000 b. $305,455 c. $454,545 O d. $553,846

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