Corporation is comparing two different capital structures

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Rolston Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, Rolston would have 165,000 shares of stock outstanding. Under Plan II, there would be 115,000 shares of stock outstanding and $1.50 million in debt outstanding. The interest rate on the debt is 8 percent and there are no taxes.

What is the break-even EBIT?

Reference no: EM131911747

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