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

question 43

Multiple Choice

A corporation has $5,000,000 in 10 percent bonds and $3,000,000 in 12 percent preferred stockoutstanding. The firm's financial break-even (assuming a 40 percent tax rate) is __________.

• A) $1,100,000
• B) $1,400,000
• C) $716,000
• D) $860,000