Demolition Construction Services has 12,500 shares of stock outstanding and no debt. The new CFO is considering issuing $75,000 of debt and using the proceeds to retire 2,500 shares of stock. The coupon rate on the debt is 6.8 percent. What is the break-even level of earnings before interest and taxes between these two capital structure options?

A) $16,860 

B) $18,520 

C) $18,240 

D) $21,000 

E) $15,300

Answer rating: 100% (QA)

Break even level is computed as follows EBIT Number ... View the full answer