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A corporation is totally equity financed with 34,000 common shares outstanding. The Board is considering a management proposal to borrow $180,000 at an 8% interest

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A corporation is totally equity financed with 34,000 common shares outstanding. The Board is considering a management proposal to borrow $180,000 at an 8% interest rate. The proceeds will be used to repurchase and retire 9,000 common shares. Ignore income taxes in your calculations. A. What is the indifference EBIT? O$56,100 O$53,200 O$55,200 O$55,900 O$54,400 B. If the EBIT is below the indifference point, which capital structure would maximize EBIT? OTotal equity ODebt and equity

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