ADA, Inc. currently has 20,000 shares of stock outstanding at a market value of $40 a share. The ﬁrm is currently 100% ﬁnanced with equity. ADA is considering a restructuring which will include
Issuing $400,000 of bonds at par value with a coupon rate of 6%. What is the break-even EBIT?
A) $12,000
B) $24,000
C) $36,000
D) $48,000
E) $60,000

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The Answer of ADA, Inc. currently has 20,000 shares of stock outstanding at a market value of $40 a share. The ﬁrm is currently 100% ﬁnanced with equity. ADA is considering a restructuring which will include
Issuing $400,000 of bonds at par value with a coupon rate of 6%. What is the break-even EBIT?
A) $12,000
B) $24,000
C) $36,000
D) $48,000
E) $60,000

ADA, Inc Currently Has 20,000 Shares of Stock Outstanding at a a Market