Question: Room and Board is considering two capital structures that have a break-even EBIT of $32,400. The all-equity capital structure would have 18,400 shares outstanding. The

Room and Board is considering two capital structures that have a break-even EBIT of $32,400. The all-equity capital structure would have 18,400 shares outstanding. The levered capital structure would have 13,600 shares of stock and $99,000 of debt. What is the interest rate on the debt? Ignore taxes.

Multiple Choice

8.94%

9.76%

8.11%

8.54%

7.66%

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