Question
Kurt's Kites has 17,500 shares of stock outstanding and no debt. The new CFO is considering issuing $120,000 of debt and using the proceeds to
Kurt's Kites has 17,500 shares of stock outstanding and no debt. The new CFO is considering issuing $120,000 of debt and using the proceeds to retire,500 shares of stock. The coupon rate on the debt is 9 percent. What is the break-even level of earnings before interest and taxes between these two capital structure options? The correct answer is $ 75600
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Fundamentals of Investments, Valuation and Management
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
8th edition
1259720697, 1259720691, 1260109437, 9781260109436, 978-1259720697
