Question: A firm is considering two alternative plans for financing its $100,000,000 in assets. Plan A would consist of %20 million debt at an interest rate

A firm is considering two alternative plans for financing its $100,000,000 in assets. Plan A would consist of %20 million debt at an interest rate of 7.5% and $80 million equity (2 million shares). Plan B would consist of $40 million debt at an interest rate of 8.5% and $60 million equity (1.5 million shares). If the firms tax rate is 34%, what is the EBIT break-even point?

A- 8.75 million

B- 9.64 million

C- 8.32 million

D- 9.10 million

E- 10.06 million

Please show the calculation steps so I can understand how to solve.

Thank you!

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