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During the previous year, a company paid $120 million of interest expense, and its average rate of interest for the year was 8.0%. The company's
During the previous year, a company paid $120 million of interest expense, and its average rate of interest for the year was 8.0%. The company's ROE is 13.8%, and it pays no dividends. Estimate next year's interest expense assuming that interest rates will fall by 29% and the company keeps a constant equity multiplier.
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