Ipsy Dipsy Preschools Inc. has a capital structure that consists of $60\%$ common equity $(2\mathrm{.}0$ million shares$),30\%$ longterm debt $($$$10$ million with $12\%$ coupon$),$ and $10\%$ preferred stock $($$$50$ par value with $$4\mathrm{.}75$ dividend$).$ The company is planning a major plant expansion and is undecided between the following two financing plans:

$1)$ Equity financing: Sale of $400,000$ shares of common at $$10$ each

$2)$ Debt financing: Sale of $$4$ million of $12\mathrm{.}5$ percent long$-$term bonds

Calculate the EBIT$-$EPS indifference point, assuming the marginal tax rate is $40\%.$