Ebit break-even between debt firm and all-equity firm

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Reference no: EM132052829

Calculate an EBIT break-even between a debt firm (DF) and an all-equity firm (EF) based on the following information: DF interest = $ 49,700, DF number common shares = 5,300, EF number of common shares = 10,500 and tax rate = 35 percent. Check your answer by calculating the EPS for both DF and EF at the break-even EBIT.

Reference no: EM132052829

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