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5. CFO of Graham Del plans to have the company issue $500 million of new common stock and use the proceeds to pay off some

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5. CFO of Graham Del plans to have the company issue $500 million of new common stock and use the proceeds to pay off some of its outstanding bonds. Assume that the company, which does not pay any dividends, takes this action, and that total assets, operating income (EBIT), and its tax rate all remain constant. What affect it can have on the company's financial statements. Discuss

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