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( 5 pts ) The Mica Company has an EBIT of $ 5 . 4 3 million, and total capital of $ 5 6 million.

(5 pts) The Mica Company has an EBIT of $5.43 million, and total capital of $56 million. The company pays 8% 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 companys financial results? Why or why not?

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