Minimum level for ebit that the firm mgmt is expecting

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Reference no: EM132052930

A corporation has decided in favor of capital restructuring that involves increasing its existing $80 Million in debt to $125 Million and repurchasing shares. The interest rate of the debt is 9% and is not expected to change. The firm currently has 10 million shares outstanding, and the market price per share is $45. If the restructuring is expted to increase the ROE, what is the minimum level for EBIT that the firm's mgmt is expecting? Ignore taxes.

Reference no: EM132052930

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