Question: Alpha Company is looking at two different capital structures, one an all equity firm and the other a levered firm with $2 million of debt

Alpha Company is looking at two different capital structures, one an all equity firm and the other a levered firm with $2 million of debt financing at 14% Interest. The all-equity firm will have a value of $4 million and 400,000 shares outstanding. The levered firm will have 200,000 shares outstanding. a. What is the break-even EBIT for Alpha Company If there are no corporate taxen? (Round to the nearest dollar.)

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