Question 6 (15 marks) After graduating from college, you decide to set up your own company, requiring a $100,000 initial investment. You can bring that money yourself (making you thus hold 100,000 shares of $1), but alternatively, you could borrow $35,000 at an interest rate of 5% per annum and thus only bring in $65,000. Assume that there is no asset to be depreciated and that the applicable tax rate is 25%. a) If the estimated annual EBIT for your business is $12,000, which financing alternative would you adopt? (6 marks) b) Looking at the EPS, what is the EBIT indifference level of your business if you opt for the debt + equity financing? c) Explain the results (6 marks) (3 marks)