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Room and Board is considering two capital structures that have a break-even EBIT of $18,000. The...

Room and Board is considering two capital structures that have a break-even EBIT of $18,000. The all-equity capital structure would have 13,500 shares outstanding. The levered capital structure would have 10,000 shares of stock and $75,000 of debt. What is the interest rate on the debt? Ignore taxes.

  • 7.11%

  • 6.52%

  • 5.58%

  • 5.91%

  • 6.22%

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