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Galaxy Products is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would

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Galaxy Products is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 175,000 shares of stock outstanding. Under Plan II, there would be 90,000 shares of stock outstanding and $1.4 million in debt. The interest rate on the debt is 7 percent and there are no taxes. What is the break-even EBIT? A) $351, 111.11 B) $201, 764.71 C) $233, 333.33 D) $287, 878.78 E) $341, 414.14

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