Question: A firm is considering two different capital structures. The first option is an all - equity firm with 3 4 , 1 2 4 shares

A firm is considering two different capital structures. The first option is an all-equity firm with 34,124 shares of stock. The second option is 17,888 shares of stock plus some debt. Ignoring taxes, the breakeven level of earnings before interest and taxes between these two options is $45,514. How much money is the firm considering borrowing if the interest rate is 7.89 percent?

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