Freezing Corp. currently has no debt in its capital structure. The company is considering to issue $5 million debt and use the proceeds to buy back shares. The firms value of assets is $10 million and share price is $50/share. The required rate of return on debt is 10%. What is the correct answer using the break-even EBIT?

A) EBIT > $800,000 B) EBIT > $1,000,000 C) EBIT > $1,500,000 D) EBIT > $2,000,000 E) EBIT > $2,500,000

Answer is B) EBIT > $1,000,000 - need in-depth solution.