Kelso Electric is debating between a leveraged and an unleveraged capital structure. The all-equity capital structure would consist of 600,000 shares of stock. The debt and equity option would consist of 300,000 shares of stock plus $4, 500, 000 of debt with an interest rate of 10 percent.

What is the break-even level of earnings before interest and taxes between these two options? Ignore taxes.

If all of your EBIT predictions for the company are a