Intro Caligula Corp. has 830,000 shares outstanding, currently trading at $49. The company is borrowing $3,600,000 to buy back some shares. The interest rate is 9%. Assume that the buy-back does not affect the stock price. B Attempt 3/5 for 6 pts. Part 1 What is the break-even EBIT if there are no taxes? 3,660,319 Correct New number of shares outstanding: N4 = No - D/PO = 830,000 - 3,600,000 / 49 = 756,531 Annual interest payments: I = D. RD = 3,600,000 * 0.09 = 324,000 The break-even EBIT makes EPS equal under both capital structures: EPS unlevered = EPSlevered EBIT EBIT - I No Ni - 324,000 EBIT = - = 3,660,300 756,831 1 - 1 630,000 Attempt 1/5 for 10 pts. IB Part 2 What is the break-even EBIT if the tax rate is 34%? No decimals Submit