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Neptune Corporation's current capital structure consists of common stock ($532 million, 28 million shares) and bonds outstanding ($500 million, 5% coupon rate). The firm is

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Neptune Corporation's current capital structure consists of common stock ($532 million, 28 million shares) and bonds outstanding ($500 million, 5% coupon rate). The firm is considering the following plans to raise $19 million for their expansion: Plan A: Debt Financing: Issue 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 form be indifferent between the two plans? $47.8 million $63.7 million $19 million $69.1 million $43.7 million

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