The capital structure of two companies is as follows: The EBIT of both companies was as follows:
Question:
The capital structure of two companies is as follows:
The EBIT of both companies was as follows:
The rate of corporation tax on profits is 25 per cent.
a Calculate the net profit after-tax earned for ordinary shareholders for each year and for each company.
b Comment on the effect that gearing has had on the results.
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