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Prudential Corp. Inc. has total assets of P 10 billion financed 50% with debt and 50% equity. Cost of debt is 8% before taxes (5.6%
Prudential Corp. Inc. has total assets of P 10 billion financed 50% with debt and 50% equity. Cost of debt is 8% before taxes (5.6% after tax) and cost of equity is 10%. EBIT is P 500 million and a tax rate of 30%. What is its residual income?
Group of answer choices
a. P 20 million
b. P 50 million
c. P 70 million
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