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A firm has a current capital structure consisting of $400,000 of 6 percent annual interest debt and 50,000 shares of common stock. The firm's tax

  1. A firm has a current capital structure consisting of $400,000 of 6 percent annual interest debt and 50,000 shares of common stock. The firm's tax rate is 21 percent on ordinary income. If the EBIT is expected to be $200,000, two EBIT-EPS coordinates for the firm's existing capital structure are ________.

    ($0, $24,000) and ($200,000, $1.82)

    ($24,000, $0) and ($200,000, $3.52)

    ($24,000, $0) and ($200,000, $2.78)

    ($24,000, $0) and ($200,000, $0.74)

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