Break-even ebit

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Break-even EBIT? (with and without ?taxes).

Alpha Company is looking at two different capital? structures, one an? all-equity firm and the other a levered firm with ?$4.4 million of debt financing at16?%interest. The? all-equity firm will have a value of ?$8.8million and 440,000 shares outstanding. The levered firm will have 220,000 shares outstanding.

a. Find the? break-even EBIT for Alpha Company using EPS if there are no corporate taxes.

b. Find the? break-even EBIT for Alpha Company using EPS if the corporate tax rate is 20?%.

c. What do you notice about these two? break-even EBITs for Alpha? Company?

a. What is the? break-even EBIT for Alpha Company using EPS if there are no corporate? taxes?

?$ ?(Round to the nearest? dollar.)

Reference no: EM131503052

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