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A Corporation Has $5,000,000 of 10 Percent Bonds and $3,000,000

Question 6

Multiple Choice

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) $1,100,000
D) $1,400,000

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