Break-even level of earnings before interest and taxes

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Reference no: EM131554172

margarita's is an all equity firm that has 5,000 shares of stock outstanding at a market price of $15 a share. the firm's management has decided to issue $30,000 worth of debt and use the funds to repurchase shares of the outstanding stock. the interest rate of the debt will be 10 percent. what is the break-even level of earnings before interest and taxes? the tax rate is 30%.

Reference no: EM131554172

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