Question
Break-even EBIT. Kyle Corporation is comparing two different capital structures, an all equity plan (Plan 1) and a levered plan (Plan 2). Under Plan 1,
Break-even EBIT. Kyle Corporation is comparing two different capital structures, an all equity plan (Plan 1) and a levered plan (Plan 2). Under Plan 1, kyle would have 900,000 shares of stock outstanding. Under Plan 2, there would be 650,000 shares of stock outstanding and 10 million in debt outstanding. Int rate is 10%. No taxes.
What is the breakeven EBIT?
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Financial Management Theory And Practice
Authors: Eugene F. Brigham, Michael C. Ehrhardt
17th Edition
0357714482, 9780357714485
