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

    Sep 18, 2015, 07:27 AM
    How do I calculate a firms financial breakeven?
    How do I calculate the firms financial breakeven (assuming a 40% tax rate) if I know it has $5M of 10% bonds and $3M of 12% preferred stock outstanding? I want to understand how to do this, not just the correct answer.
    ma0641's Avatar
    ma0641 Posts: 15,675, Reputation: 1012
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    #2

    Sep 18, 2015, 10:39 AM
    What have you tried? I'm sure your textbook has the formulas. Remember, taxes and dividends are negatives so more sales must be made to offset them. However, if you Google "calculating a firm's break even point", you will find hundreds of hits.
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