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    hank2012's Avatar
    hank2012 Posts: 1, Reputation: 1
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    #1

    Jul 28, 2012, 08:23 AM
    Finance problem EBIT
    Find the indifference level associated with the following two plans:

    A: all common equity structure in which 2.4 million dollars raised by selling 90,000 shares of common stock.

    B: plan B involves issuing 1.4 million in long term bonds effective rate of 11.6% plus 1 million would be raised by selling 45,000 shares of common stock.

    No fixed maturity date, and a 34% tax rate.
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
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    #2

    Jul 29, 2012, 05:25 AM
    The formula for determining the indiff point is not difficult, but ultimately it starts with the following necessary equation:

    You show your attempts at solving the problem = you receive help where you're having difficulty
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