Roxys is an all-equity firm that has 10,000 shares of stock outstanding at a market price of $25 per share. The firm's management has decided to issue $100,000 worth of debt at an interest rate of 9 percent. The funds will be used to repurchase shares of the outstanding stock. What are the earnings per share at the break-even EBIT?

Multiple Choice

• $2.25

• $2.70

• $3.75

• $4.06

• $5.63

Roxys is an all-equity firm that has 10,000 shares of stock outstanding at a market price of $25 per share. The firm's management has decided to issue $100,000 worth of debt at an interest rate of 9 percent. The funds will be used to repurchase shares of the outstanding stock. What are the earnings per share at the break-even EBIT? Multiple Choice $2.25 O o $2.70 $3.75 O O $4.06 $5.63