An all-equity financed firm has $6m in assets and the stock price is $200. If the firm restructures with 40 percent debt which creates interest expense of $240,000 per year and the firm's tax rate is 21 percent, what is the break-even EBIT?
A) $336,000
B) $380,000
C) $432,000
D) $600,000
Correct Answer:
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