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TRANS-ALASKA PIPELINE is an all-equity firm with 10 million shares outstanding and is evaluating two alternative financing plans. With the first plan, TRANS-ALASKA will sell
TRANS-ALASKA PIPELINE is an all-equity firm with 10 million shares outstanding and is evaluating two alternative financing plans. With the first plan, TRANS-ALASKA will sell 1 million shares of common stock at $15 each. Under the second plan, the firm would sell $15 million of 12% long-term debt. If TRANS-ALASKA has a marginal tax rate of 35%, what is the EBIT-EPS indifference point?
| $12.9 million |
| $19.8 million |
| $11.7 million |
| $18.0 million |
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