How much debt should be in its capital structure

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Reference no: EM131185078

Yang Centers wants to report atleast $1.75 in earnings per share. Given the following information, how much debt should be in its capital structure?

Book value per share: $8.75

cost of debt: 10%

EBIT: $500,000

tax bracket: 30%

total capital: $4,000,000

a) 457,142

b) 520,050

c) 2,800,000

d) 3,461,538

Reference no: EM131185078

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