Question: Alpha Company is looking at two different capital structures, one an all-equity firm and the other a levered firm with $1.44 million of debt financing

Alpha Company is looking at two different capital structures, one an

all-equity firm and the other a levered firm with $1.44 million of

Alpha Company is looking at two different capital structures, one an all-equity firm and the other a levered firm with $1.44 million of debt financing at 9% interest The all-equity firm will have a value of $4.8 million and 480,000 shares outstanding. The levered firm will have 336,000 shares outstanding. a. What is the break-even EBIT for Alpha Company if there are no corporate taxes? $ (Round to the nearest dollar.) Assume the following in 5 millions: Cash and Equivalents = $ 16; Accounts Receivable = $30; Accounts Payable = $20; Short-Term Debt = 56; Inventories = $18; Other Current Liabilities = $14; and Other Current Assets = $10. What is Net Working Capital? OA. -$17 OB. -$34 OC. $44 O D. $34

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