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Given the following information: Total assets = $2,000,000 Debt = 40%, Equity = 60% Cost of equity = 9% Cost of debt (before tax) =
Given the following information: Total assets = $2,000,000 Debt = 40%, Equity = 60% Cost of equity = 9% Cost of debt (before tax) = 5% EBIT = $200,000 Tax rate = 20% Residual income is closest to: Question 4Answer a. $108,000 b. $4,000 c. $40,000
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