1.An all-equity firm has decided to issue $3 million worth of bonds and use the proceeds to repurchase 60,000 existing shares. There are currently 2 million shares outstanding. The annual interest rate on the new debt will be 12%. What is the break-even EBIT? (Do not round intermediate calculations. Round the final answer to 2 decimal places. )

2.Assume you just bought 100 call contracts on shares of Company A. The options can be exercised in one years time at the strike price of $26. You paid $0.10 per option. The shares of the company are currently selling at $23.50 per share. If the company's share price rises to $27 in one years time, what will be your net gain from the call options? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)