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( 5 pts ) The Mica Company has an EBIT of $ 5 . 7 6 million, and total capital of $ 5 5 million.

(5 pts) The Mica Company has an EBIT of $5.76 million, and total capital of $55 million. The company
pays 6% interest on its debt and is subject to a total tax rate of 25%. At the current profitability, will
borrowing more money (taking on more debt) enhance the company's financial results? Why or why
not?
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