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Haricot Corporation and Pinto Corporation both have operating profits of $105 million. Haricot is financed solely by equity, while Pinto has issued $155 million of
Haricot Corporation and Pinto Corporation both have operating profits of $105 million. Haricot is financed solely by equity, while Pinto has issued $155 million of 6% debt. If the corporate tax rate is 21% : Required: a. How much tax does each company pay? b. What is the total payout to investors (debtholders plus shareholders) of each company? Complete this question by entering your answers in the tabs below. How much tax does each company pay? Note: Enter your answer in dollars not in millions
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