Room and Board is considering two capital structures that have a break-even EBIT of $28,200....
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Room and Board is considering two capital structures that have a break-even EBIT of $28,200. The all-equity capital structure would have 17,000 shares outstanding. The levered capital structure would have 12,550 shares of stock and $92,000 of debt. What is the interest rate on the debt? Ignore taxes.
A. 9.17%
B. 7.62%
C. 7.20%
D. 8.02%
E. 8.41%
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