Julianne Biomedical is looking at expanding into making rapid PCR tests for viruses. Currently they have 8,000 shares outstanding and $1,000,000 in debt with an interest rate of 6%. The expansion will cost $2,500,000 million. They are looking at two options for financing the expansion.

Issue $2,500,000 in shares at a price of $25 per share Issue debt at a rate of 6% Calculate the indifference point in terms if EBIT for the two options

At an EBIT of $60,000 which option should Julianne Biomedical choose?

I need the solution and answer of the question. Thank you.