Simone's Sweets is an all-equity firm that has 8,500 shares of stock outstanding at a market price of $26 per share. The firm's management has decided to issue $80,000 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?

Multiple Choice

• $2.08

• $3.53

• $2.50

• $5.75

• $3.26