What is the break-even ebit between the two plans

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Kelso Electric is an all-equity firm with 53,750 shares of stock outstanding. The company is considering the issue of $365,000 in debt at an interest rate of 7 percent and using the proceeds to repurchase stock. Under the new capital structure, there would be 33,500 shares of stock outstanding. Ignore taxes. What is the break-even EBIT between the two plans?

Reference no: EM132355586

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