Kelso Electric is an all-equity firm with 41,750 shares of stock outstanding. The company is...
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Kelso Electric is an all-equity firm with 41,750 shares of stock outstanding. The company is considering the issue of $285,000 in debt at an interest rate of 7 percent and using the proceeds to repurchase stock. Under the new capital structure, there would be 25,500 shares of stock outstanding. Ignore taxes. What is the break-even EBIT between the two plans?
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