Question: Your company is comparing two different capital structures, an all - equity plan ( Plan A ) and a levered plan ( Plan B )

Your company is comparing two different capital structures, an all-equity plan (Plan A) and a levered plan (Plan B). Under Plan A, the company would have 200,000 shares of stock outstanding. Under Plan B, the company would have 100,000 shares of stock outstanding and $4 million in debt outstanding. The interest rate on debt is 8% and there are no taxes. What is the break-even EBIT?

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