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What is the interest rate on the debt

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Question 1: Room and Board is considering two capital structures that have a break-even EBIT of $27,600. The all-equity capital structure would have 16,800 shares outstanding. The levered capital structure would have 12,400 shares of stock and $91,000 of debt. What is the interest rate on the debt? Ignore taxes.

Option 1: $2.60
Option 2: $1.30
Option 3: $1.86
Option 4: $2.41
Option 5: $1.11

Reference no: EM132869420

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