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13. Nizwa Corporation's return on net operating assets (RNOA) is 10% and its tax rate is 35%. Its net operating assets (OMR 3 million) are
13. Nizwa Corporation's return on net operating assets (RNOA) is 10% and its tax rate is 35%. Its net operating assets (OMR 3 million) are financed entirely by common shareholders' equity. Management is considering its options to finance an expansion costing OMR 2 million. It expects return on net operating assets to remain unchanged. There are two alternatives to finance the expansion: 1. Issue OMR 1 million bonds with 11% coupon, and OMR 1 million common stock. 2. Issue OMR 2 million bonds with 11% coupon. Required: Determine net operating income after tax (NOPAT) and net income for each alternative
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