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A firm reports earnings before interest and tax (EBIT) of $100 million and net income of $25 million. If the firm pays tax at the

A firm reports earnings before interest and tax (EBIT) of $100 million and net income of $25 million. If the firm pays tax at the rate of 25%, which of the following comes closest to the amount of interest that the firm pays on its debt?

A.

The firm pays $0.00 million of interest on the debt.

B.

The firm pays $50.00 million of interest on the debt.

C.

The firm pays $75.00 million of interest on the debt.

D.

The firm pays $23.33 million of interest on the debt.

E.

The firm pays $66.67 million of interest on the debt.

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