Question: Room and Board is considering two capital structures that have a break-even EBIT of $21,000. The all-equity capital structure would have 14,600 shares outstanding. The

Room and Board is considering two capital structures that have a break-even EBIT of $21,000. The all-equity capital structure would have 14,600 shares outstanding. The levered capital structure would have 10,750 shares of stock and $80,000 of debt. What is the interest rate on the debt? Ignore taxes.

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