The results from the breakeven EBIT analysis are calculated to current market conditions. The market has equities; in particular, California Pizza priced its prices at very high valuations. This is exhibited by California Pizza’s price/earnings ratio of 31.9. Because of this lofty valuation, if California Pizza is going to repurchase shares at the current market price of $22.10, it will be costly to investors. It will be especially expensive to investors to buy back shares if California Pizza using debt because their cost of debt is higher than their cost of equity.