Alpha Corp. has decided to change the companys capital structure. The decision that they reach is to increase the leverage of their balance sheet, taking long-term debt from $ 80 million to $ 125 million. The current coupon on their outstanding debt is 7% and they expect that in order to issue that much new debt, they will have to offer the investors 7% as well. Alpha Corp. is publicly held and currently has 10 million shares outstanding. Those shares trade on NASDAQ and traded at $ 45/share at the close of the market, Friday, October 6.

Managements goal with all of this is to increase the companys Return on Equity (ROE). IGNORE TAXES...What is the minimum level for EBIT that Alpha Corp.s management will find acceptable?