Select Financial Data Long-term debt $375.0 million Borrowing...
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Finance
| Select Financial Data | |
|---|---|
| Long-term debt | $375.0 million |
| Borrowing rate | 8% |
| Interest expense | $30 million |
| Tax rate | 35% |
| Preferred stock dividends | $8 million |
| Earnings per share | $0 |
Based on the preceding information, what is the EBIT that Liverpool Inc. must achieve in order to hit its financial breakeven point?
421.15
387.31
40.19
42.31
46.54
After further analysis, Liverpool Inc. has determined that it will not be issuing preferred dividends as it had previously planned. What sort of additional decision-making flexibility will this offer the managers of Liverpool Inc., while still allowing the company to meet its financial breakeven point?
Liverpool Inc. could borrow an additional $169.4 million at its current borrowing rate to finance expansion.
Liverpool Inc. could borrow an additional $154 million at its current borrowing rate to finance expansion.
Liverpool Inc. could pay off 75% of its long-term debt.
Liverpool Inc. could repurchase 20% of its outstanding common stock.
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