2) Suppose Company XYZ is evaluating a potential capital restructuring decision. The company is evaluating its decision of taking 1 million loan and will use the fund to repurchase shares. Currently the company do not have any debt. The interest rate on the debt will be 10 percent. Company XYZ currently has 150,000 shares outstanding, and the price per share is $20. What will be the break even EBIT? 290,000 300,000 310,000 315,000 None of the above
2) Suppose Company XYZ is evaluating a potential capital restructuring decision. The company is evaluating its decision of taking 1 million loan and will use the fund to repurchase shares. Currently the company do not have any debt. The interest rate on the debt will be 10 percent. Company XYZ currently has 150,000 shares outstanding, and the price per share is $20. What will be the break even EBIT? 290,000 300,000 310,000 315,000 None of the above
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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