There Are No Taxes

Multiple Choice

There are no taxes. EBIT is expected to be $2.5 million, but could be as high as $3.5 million if an economic expansion occurs, or as low as $2 million if a recession occurs. All values are market
Values.
How many shares are outstanding under the proposed capital structure?

A) 100,000
B) 200,000
C) 300,000
D) 400,000
E) 500,000