Kelso Electric is an all-equity firm with 58,250 shares of stock outstanding. The company is considering the issue of $395,000 in debt at an interest rate of 9 percent and using the proceeds to repurchase stock. Under the new capital structure, there would be 36,500 shares of stock outstanding. Ignore taxes. What is the break-even EBIT between the two plans?

Multiple Choice

• $81,607

• $103,143

• $67,116

• $95,209

• $59,659