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54. A company has 7.01 million common shares outstanding and $56 million of debt with an...

54. A company has 7.01 million common shares outstanding and $56 million of debt with an interest rate of 5.4%. The company wants to raise another $44.8 million. It can do so by selling an additional 3.505 million shares of common stock (the equity plan) or by taking out a bank loan with an interest rate of 6.4% (the debt plan). The company has no preferred stock. The corporate tax rate is 28%. At what level of EBIT would the company have the same earnings per share (EPS) under either plan? Specify the answer in $ mln., to the nearest $0.01 mln., drop the $ symbol.

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 2 years ago
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