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can you answer this please? with explanation For the purpose of the following questions, you can assume that the business, or project risk of each

can you answer this please? with explanation image text in transcribed
For the purpose of the following questions, you can assume that the business, or project risk of each company's earnings before interest and taxes (EBIT) is identical. You can also assume that the market value of the company's Interest bearing liabilities is the same as the book value, and that investors and the company can both borrow and lend at the risk free rate of interest. Tamma Tupper Tazzle Tease Income Statement Earnings before interest and tax (EBIT) 640 640 840 806 Interest expense E150 o 5150 Tax EO EO E? E? Earnings after tax E640 490 640 E500 Dividend paid 640 5490 640 250 Retained Earnings ED 250 Balance Sheet Total Assets E10,000 10,000 10,000 E10,000 Total Interest Bearing Liabilities 7,500 7,500 Shareholders Funds E10,000 E2.500 10,000 E2.500 Number of shares in issue 20,000 5,000 20.000 5,000 Corporate tax rate 0 0 25% 25% Risk free rate of interest 2.00% 2.00% 2.00% 2.00% Equity Market Risk Premium 5.5096 5.50% 5.50% 5.50% Equity Market Beta 0.80 3.20 0.80 3.20 Expected earnings growth rate 0.00% 0.00% 0.00% 40% EO REQUIRED: How much tax do the shareholders of Tazzle and Tease pay respectively? Answer Tazzle Tease E200 188 B 200 156 156 E188 D 188 E200

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