Tanager, Inc. just hired a new chief financial officer who is now contemplating two separate capital structures for the firm. The first structure would consist of 15,000 shares of stock. The second structure would consist of 10,000 shares of stock plus 25,000 of debt. The debt would have an interest rate of 7 percent. What is the break-even EBIT between these proposed structures? Ignore taxes.

$6,340

$5,460

$5,900

$5,250