Question
Grommit Engineering expects to have net income next year of $47.33 million and free cash flow of $23.67 million. Grommit's marginal corporate tax rate is
Grommit Engineering expects to have net income next year of $47.33 million and free cash flow of $23.67 million. Grommit's marginal corporate tax rate is 30%.
a. If Grommit increases leverage so that its interest expense rises by $6.1 million, how will net income change?
b. For the same increase in interest expense, how will free cash flow change?
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Handbook Of Environmental And Sustainable Finance
Authors: Vikash Ramiah, Greg N. Gregoriou
1st Edition
012803615X, 978-0128036150
