Aspen Company is financed with $50 million of 8% debt and $75 million of common equity. The firm has 1 million shares of common stock outstanding. Aspen needs to raise $20 million and is undecided between two possible plans for raising this capital:

Plan A: Equity financing. Under this plan, common stock will be sold at $100 per share. Plan B: Levered financing. Under this plan, half of the capital will be raised with equity at $100 per share and half will be raised by selling 12% coupon bonds.

At what level of operating income (EBIT) will the firm be indifferent between the two plans? Assume a 21% marginal tax rate.

USE EBIT breakeven formula

answer is 18.4 million but need work