Question
Chick 'N Fish is considering two different capital structures. The first option is an all-equity firm with22,500 shares of stock. The second option consists of
Chick 'N Fish is considering two different capital structures. The first option is an all-equity firm with22,500 shares of stock. The second option consists of 18,750 shares of stock plus $120,000 of debt at an interest rate of 7.8 percent. Ignore taxes. What is the break-even level of earnings before interest and taxes (EBIT) between these two options
$62,813
$54,204
$60,410
$56,150
$61,290
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Lessons In Corporate Finance
Authors: Paul Asquith, Lawrence A. Weiss
2nd Edition
1119537835, 978-1119537830
