Question
Pelamed Pharmaceuticals had EBIT of $325 million in 2013. In addition, Pelamed had interest expenses of $125 million and a corporate tax rate of 40%.
Pelamed Pharmaceuticals had EBIT of $325 million in 2013. In addition, Pelamed had interest expenses of $125 million and a corporate tax rate of 40%.
a. What was Pelamed's 2013 net income?
b. What was the total of Pelamed's 2013 net income and interest payments?
c. If Pelamed had no interest expenses, what would its 2013 net income have been?
How does it compare to your answer in part (b)?
d. What was the amount of Pelamed's interest tax shield in 2013?
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Financial and Management Accounting
Authors: Pauline Weetman
7th edition
1292086599, 978-1292086590
