Hotel Cortez is an all-equity firm that has 11,500 shares of stock outstanding at a market price of $36 per share. The firm's management has decided to issue $70,000 worth of debt and use the funds to repurchase shares of the outstanding stock. The interest rate on the debt will be 6 percent. What is the break-even EBIT?

rev: 05_12_2020_QC_CS-212284

Multiple Choice

• $21,291

• $26,910

• $13

• $15

• $24,840