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5 pts Question 19 QUESTION 19 (suggested time 12 minutes) GoCanucksGo Inc. (GCG) has a current capital structure of $50 million in long-term debt (LTD)

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5 pts Question 19 QUESTION 19 (suggested time 12 minutes) GoCanucksGo Inc. (GCG) has a current capital structure of $50 million in long-term debt (LTD) at an interest rate of 10% (paid annually) and $40 million in common equity (10 million shares). GCG is considering an expansion program that will cost $10 million. This program can be financed with additional LTD at a 13% rate of interest (paid semi- annually), preferred shares at a 14% rate (paid quarterly), or the sale of new common shares at $10 per share. Required (a) Compute the indifference level of EBIT between the comnan share alternative and the LTD alternative (b) Compute the indifference level of EBIT between the common share alternative and the preferred share alternative. (c) Is there an indifference point between the LTD and preferred share alternatives? Explain

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