Question

At indifference level of ebit different capitals have

Answer 1

At indifference level of ebit different capitals have Indifference Earnings Before Interest & Taxes (Indifference EBIT) is the point of the capital structure where the corporation does not care about whether they issue new debt, have no debt and 100% equity or have a combination of both debt & equity.

From the graph below, you can determine that the Indifference EBIT point is where the With Debt Capital Structure Line intersects with the No Debt Capital Structure Line.

Any point to the left of Indifference EBIT is risky debt while any point to the right of Indifference EBIT is good debt (interest expense that is tax deductible).