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A firm is considering two separate capital structures. The first is an all-equity structure consisting of 25,000 shares of stock. The second structure would consist
A firm is considering two separate capital structures. The first is an all-equity structure consisting of 25,000 shares of stock. The second structure would consist of 10,000 shares of stock and $90,000 in debt at a cost of 8%. Ignore income taxes. What is the EBIT at which earnings per share of the two capital structures are the same?
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