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Hotel Cortez is an all-equity firm that has 10,600 shares of stock outstanding at a market price of $35 per share. The firm's management has
Hotel Cortez is an all-equity firm that has 10,600 shares of stock outstanding at a market price of $35 per share. The firm's management has decided to issue $64,000 worth of debt and use the funds to repurchase shares of the outstanding stock. The interest rate on the debt will be 7 percent. What is the break-even EBIT?
Multiple Choice
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$22,451
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$27,284
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$26,193
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$30,694
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$28,375
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