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please explain and steps and how to answer this question 5. ( 5 points) Currently a firm with no debt has forecasted revenues of $100m,
please explain and steps and how to answer this question 5. ( 5 points) Currently a firm with no debt has forecasted revenues of $100m, an operating margin forecasted to equal 30%, non-operating income of $20m, and an income tax rate of 20% is expected to generate $40 million in net income next year. The firm, however, is considering issuing \$200 million in debt at a market rate of 6%/ year (the increase in debt will not impact future revenue). If the economy crashes and revenue decreases by 30%, what would be the percentage change in forecasted net income equal if the firm does not issue debt and what would the percentage change in forecasted net income equal if the firm does issue the $200 million of debt? What did you learn from this analysis
please explain and steps and how to answer this question
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