Rolled Gold Jewelers is an all-equity firm, with 5,000 shares of stock outstanding at a market price of $15 a share. The firm's management decided to issue $30,000 worth of debt and use the funds to repurchase shares of the outstanding stock. The interest rate on the debt will be 10%. What is the EPS at the break-even level of EBIT? Ignore taxes.

Multiple Choice

$1.46

$1.50

$1.67

$1.88

$1.94