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An all equity firm has decided to issue $2,000,000 worth of bonds and to using the proceeds to repurchase existing stocks. There are currently 1

An all equity firm has decided to issue $2,000,000 worth of bonds and to using the proceeds to repurchase existing stocks. There are currently 1 million shares outstanding, each selling for a market price of $25. The annual interest rate on the new debt will be 11%. What is the break-even EBIT at which EPS will stay constant before and after the bond issue?

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