Question: A firm is considering two different capital structures. The first option is an all-equity firm with 42,500 shares of stock. The levered option is 29,400

A firm is considering two different capital structures. The first option is an all-equity firm with 42,500 shares of stock. The levered option is 29,400 shares of stock plus some debt. Ignoring taxes, the break-even EBIT between these two options is $56,400. How much money is the firm considering borrowing if the interest rate is 8.0 percent?

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