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Haricot Corp. and Pinto Corp. both have profits of $115 million. Haricot is financed solely by equity, while Pinto has issued $165 million of 8%
Haricot Corp. and Pinto Corp. both have profits of $115 million. Haricot is financed solely by equity, while Pinto has issued $165 million of 8% debt. If the corporate tax rate is 35%:
a. How much tax does each company pay? (Round your answers to 1 decimal places.)
b. What is the total payout to investors (debtholders plus shareholders) of each company? (Round your answer to 1 decimal places.)
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