Question: Room and Board is considering two capital structures that have a break-even EBIT of $22,200. The all-equity capital structure would have 15,000 shares outstanding. The

Room and Board is considering two capital structures that have a break-even EBIT of $22,200. The all-equity capital structure would have 15,000 shares outstanding. The levered capital structure would have 11,050 shares of stock and $82,000 of debt. What is the interest rate on the debt? Ignore taxes.

Multiple Choice

7.47%
8.15%
7.13%
6.40%
6.77%

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