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Jackson Inc. and Simon are two identical firms operating in identical markets. Jackson is unlevered with assets valued at $3,000 and has 175 shares of stock outstanding. Simon also has $3,000 in assets and has $1,200 in debt financed at an interest rate of 5% and has 125 shares of stock outstanding. The corporate tax rate is 30%. Which of the following comes closest to the level of EBIT that would make earnings per share the same for Jackson and Simon? a. $310 b. $275 c. $290 d. $240 e. $210

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Financial Management, Finance

Category:- Financial Management
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