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A firm is considering two different capital structures. The first option is an all-equity firm with 32,000 shares of stock. The second option is 20,000 shares of stock plus some debt. Ignoring taxes, the break-even level of earnings before interest and taxes between these two options is $48,000. How much money is the firm considering borrowing if the interest rate is 8 percent?

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Financial Management, Finance

Category:- Financial Management
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