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A firm has a current capital structure consisting of $400,000 of 12 percent annual interest debt and 50,000 shares of common stock. The firm's tax

A firm has a current capital structure consisting of $400,000 of 12 percent annual interest debt and 50,000 shares of common stock. The firm's tax rate is 40 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 ________.

A.

($36,000, $0) and ($200,000, $3.04)

B.

($0, $48,000) and ($200,000, $1.82)

C.

($48,000, $0) and ($200,000, $1.82)

D.

($152.000, $3.50) and ($150,000, $1.82)

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