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Problem 14-12 Corporate Debt (LO5) Haricot Corp. and Pinto Corp. both have profits of $200 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 $200 million. Haricot is financed solely by equity, while Pinto has issued $250 million of 5% debt. If the corporate tax rate is 25%; a. How much tax does each company pay? (Round your answers to 1 decimal places. Tax Amount Haricot Pinto million million b. What is the total payout to investors (debtholders plus shareholders) of each company? (Round your answer to 1 decimal places.) Total return to investors million
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