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Problem 14-12 Corporate Debt (LO5) Haricot Corp. and Pinto Corp. both have profits of $190 million. Haricot is financed solely by equity, while Pinto has
Problem 14-12 Corporate Debt (LO5) Haricot Corp. and Pinto Corp. both have profits of $190 million. Haricot is financed solely by equity, while Pinto has issued $240 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.) Tax Amount million million Haricot Pinto b. What is the total payout to investors (debtholders plus shareholders) of each company? (Round your answers to 1 decimal places.) Haricot Pinto Return to debtholders Return to shareholders Total return to investors $ million million 0.0 million 0.0 $
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