Question
Pelamed Pharmaceuticals has EBIT of $420 million in 2006. In addition, Pelamed has interest expenses of $125 million and a corporate tax rate of 21%.
Pelamed Pharmaceuticals has EBIT of $420 million in 2006. In addition, Pelamed has interest expenses of $125 million and a corporate tax rate of 21%.
a. What is Pelamed's 2006 net income?
b. What is the total of Pelamed's 2006 net income plus interest payments?
c. If Pelamed had no interest expenses, what would its 2006 net income be? How does it compare to your answer in part (b)?
d. What is the amount of Pelamed's interest tax shield in 2006?
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Principles Of Finance
Authors: Scott Besley, Eugene F. Brigham
2nd Edition
003034509X, 9780030345098
