You need to develop a plan for financing $6.0 million for your company, which has one million shares outstanding. Your options are to incur debt (issuing bonds with a pretax interest of 3.10%) or to use equity (selling at $20 per share). The tax rate for the firm is 30% and the estimate for EBIT is $700,000. Using the graph, select appropriate values, determine the indifference point, and make a decision about the best type of financing for your company.
| EPS ($ million) | |
| EBIT($ million) | |