What is the break-even level of earnings before interest

Reference no: EM13237850

lester's meat market is currenly an all equity firm that has 24,000 shares of work outstanding at a market price of $25 a share. the firm has decided to leverage its operating by issuing $200,000 of debt at an interst rate of 8 percent. this new debt will be issued to repurchase shares of the outstanding stock. the restructuring is ecpected to increase the earings per share. what is the break-even level of earings before interst and taxes between these two options if the tax rate is 35%?

Reference no: EM13237850

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