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Below is a part of a company's forecasted income statement for the fiscal year of 2023-2024. All figures are in thousands of dollars. The company
Below is a part of a company's forecasted income statement for the fiscal year of 2023-2024. All figures are in thousands of dollars. The company has 5 million common shares outstanding. The company needs to raise $3 million to finance a project and the company has two financing options: Borrow money from a bank and pay 7% interest each year; Or issue 0.5 million common stocks for $6 per share. Based on the given information and answer the following questions. a) Calculate the company's earnings per share for each of the financing options. b) Determine the break-even EBIT between the two financing options. If the company's projected EBIT in 2023 - 2004 is $3,500,000, is it beneficial to increase leverage
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