A corporation has 5000000 of 10 percent bonds and 3000000


A corporation has $5,000,000 of 10 percent bonds and $3,000,000 of 12 percent preferred stock outstanding. The firm’s financial breakeven (assuming a 40 percent tax rate) is

a. $860,000.

b. $716,000.

c. $1,400,000.

d. $1,100,000.

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Financial Management: A corporation has 5000000 of 10 percent bonds and 3000000
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