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What is the break-even ebit-xyz corporation

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XYZ Corporation is comparing two different capital structures: an all-equity plan (PlanI) and a levered plan (Plan II). Under Plan I, the company would have 160,000 shares of stock outstanding. Under Plan II, there would be 80,000 shares of stock outstanding and $2.8 million in debt outstanding. The interest rate on the debt is 8 percent, and tax rate is 40%.

What is the break-even EBIT (EBIT/EPS Indifference point)?

Reference no: EM132538911

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