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Company B has earnings before interest and taxes (EBIT) of $1,000,000, and currently has $10,000,000 in equity and $0 in debt. Company B is considering
Company B has earnings before interest and taxes (EBIT) of $1,000,000, and currently has $10,000,000 in equity and $0 in debt. Company B is considering a 50% debt ratio, and at this level, could acquire capital at 9% interest. The applicable tax rate is 40%. Find Company Bs net income at a 50% debt level.
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