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ABC Company has 16,178 shares of stock outstanding and no debt. The new CFO is considering issuing $44,126 and using the proceeds to retire 576

ABC Company has 16,178 shares of stock outstanding and no debt. The new CFO is considering issuing $44,126 and using the proceeds to retire 576 shares of stock. That is, the new shares outstanding will be 16,178 - 576. The coupon rate on the debt is 5.3%. What is the break-even level of Earnings before Interest and Taxes (EBIT) between the two capital structure options?

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