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PC and Mac are identical firms operating in identical markets. PC is unlevered with assets valued at $10,000 and has 400 shares of stock outstanding.

PC and Mac are identical firms operating in identical markets. PC is unlevered with assets valued at $10,000 and has 400 shares of stock outstanding. Mac also has $10,000 in assets and has $5,000 in debt financed at an interest rate of 10% and has 200 shares of stock outstanding. Both firms pay tax at the rate of 34%. Which comes closest to the level of earnings before interest and tax (EBIT) that would make earnings per share (EPS) the same for PC and Mac?
a.
b.
c.
d.
e.

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