Zylon Inc Plans Net Income of $10 Million Next Year and and Typically

Multiple Choice

Zylon Inc. plans net income of $10 million next year and typically pays 40% of its earnings in dividends. Its capital structure is one third equity and two thirds debt with no preferred stock. Zylon's MCC curve will break at:

A) $ 4,000,000.
B) $ 6,000,000.
C) $12,000,000.
D) $18,000,000.