Simone's Sweets is an all-equity firm that has 10,900 shares of stock outstanding at a market price of $22 per share. The firm's management has decided to issue $112,000 worth of debt at an interest rate of 8 percent. The funds will be used to repurchase shares of the outstanding stock. What are the earnings per share at the break-even EBIT?

rev: 10_31_2019_QC_CS-188725

Multiple Choice

• $3.58

• $3.30

• $1.76

• $3.77

• $2.11