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What is the minimum level for EBIT

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Reference no: EM132572014

Question - The ABC Commodity Corporation has decided in favour of a capital restructuring. Currently ABC Commodity Corporation uses no debt financing. Following the restructuring, however, debt will be $ 2 million. The interest rate on the debt will be 12 percent. ABC Corporation currently has 400,000 shares outstanding, and the price per share is $10. If the restructuring is expected to increase EPS, what is the minimum level for EBIT that ABC's management must be expecting? Ignore taxes.

Reference no: EM132572014

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