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Equity investors have contributed $250,000 to your start up business, while creditors provided a loan of $300,000. You have calculated your firm's WACC at 10%.
Equity investors have contributed $250,000 to your start up business, while creditors provided a loan of $300,000. You have calculated your firm's WACC at 10%. The annual interest payment is $25,000 and the marginal corporate tax rate is 21 percent. How much profit will your equity holders need to earn in order to break even in economic terms (i.e. EVA of zero)?
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