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A company is currently unlevered and has EBIT of $400 million per year and Equity of $3 billion. If they want to move to a

  • A company is currently unlevered and has EBIT of $400 million per year and Equity of $3 billion.
  • If they want to move to a 1:1 debt to equity ratio how much debt do they need to add?
  • If their corporate tax rate is 25% and they pay 4% interest on the new debt, what is their return on equity (ROE)?

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