Question: 3. A firm is considering two different capital structures. The first option is an all-equity firm with 110,000 shares of stock. The second option is

3. A firm is considering two different capital structures. The first option is an all-equity firm with 110,000 shares of stock. The second option is 75,000 shares of stock plus some debt. Ignoring taxes, the break-even level of earnings before interest and taxes between these two options is $136,000. How much money is the firm considering borrowing if the interest rate is 8 percent? A. $542,576 B. $540,909 C. $575,909 D. $584,243 E. $592,576

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