Gear Co has computed its indifference level of EBIT to be $50,000 between an equity financing option and a debt financing option. Interest expense under the debt option is $25,000 and $10,000 under the equity option. The EBIT for the firm is approximately normally distributed with an expected value of $62,000 and a standard deviation of $19,000. What is the probability that the equity financing option will be preferred?

What is the probability that Gear Co will incur losses under the debt option?