Consider two capital structure, U and L, both with $50,000 in assets. U is unlevered, and L has $20,000 of debt at 8% interest. U has 1,000 shares outstanding, while L has 600 shares outstanding. a) What is the Breakeven EBIT? (Round it up to the nearest number) b) If the EBIT is $5,000, which capital structure will be preferred and why? (3) 53 (5)