Chick 'N Fish is considering two different capital structures.The first option is an all-equity firm with 22,500 shares of stock.The second option consists of 18,750 shares of stock plus $120,000 of debt at an interest rate of 7.8 percent.Ignore taxes.What is the break-even level of earnings before interest and taxes (EBIT) between these two options?
A)$62,813
B)$54,204
C)$60,410
D)$56,150
E)$61,290

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The Answer of Chick 'N Fish is considering two different capital structures.The first option is an all-equity firm with 22,500 shares of stock.The second option consists of 18,750 shares of stock plus $120,000 of debt at an interest rate of 7.8 percent.Ignore taxes.What is the break-even level of earnings before interest and taxes (EBIT) between these two options?
A)$62,813
B)$54,204
C)$60,410
D)$56,150
E)$61,290

Chick 'N Fish Is Considering Two Different Capital Structures