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Lexingtone's current capital structure consists of common stock (5532 million, 28 million sharest and bonds outstanding (5500 million, 4% coupon rate The form is considering

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Lexingtone's current capital structure consists of common stock (5532 million, 28 million sharest and bonds outstanding (5500 million, 4% coupon rate The form is considering the following plans to raise $14.25 million for their expansion: Plan A: Debt Financing losue 20-year, $1000 par value bonds with coupon rate of 8% Plan B: Equity Financing Sell common stock at $19 per share. Assuming a 21% corporate tax rate, at what level of operating income (EBIT) will the firm beinidifferent between the two plans? $114 million $71.42 million $7.8 milion 563.2 million 561.7 million

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