need some help

Intro Caligula Corp. has 880,000 shares outstanding, currently trading at $59. The company is borrowing $4,100,000 to buy back some shares. The interest rate is 6%. Assume that the buy-back does not affect the stock price. Part 1 IB Attempt 1/10 for 10 pts. What is the break-even EBIT if there are no taxes? 3115200.001 Correct New number of shares outstanding: N1 = No - D/P. = 880,000 - 4,100,000 / 59 = 810,508 Annual interest payments: T = D* RD = 4,100,000 * 0.06 = 246,000 The break-even EBIT makes EPS equal under both capital structures: EPS unleverod = EP Slevered EBIT EBIT -I No N I - 246,000 EBIT 3,115,200 N 810,508 1 N. 1 880,000 IB Attempt 1/10 for 10 pts. Part 2 What is the break-even EBIT if the tax rate is 34%? 0+ decimals