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Corporation A and Corporation B are both expected to enjoy earnings before interest and taxes of 100.000$. Corporation A will also incur 40.000$ in interest

Corporation A and Corporation B are both expected to enjoy earnings before interest and taxes of 100.000$. Corporation A will also incur 40.000$ in interest expenses as a result of borrowing. While corporation B will have no interest expense as it does financing. Instead Corp B will pay Shareholders 40.000$ in divident income,both companies are in a%40 tax bracket

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