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Sinclair, Inc. is a levered firm with assets valued at $10,000 and has debt issued at 10% interest. Sinclair pays tax at the rate of
Sinclair, Inc. is a levered firm with assets valued at $10,000 and has debt issued at 10% interest. Sinclair pays tax at the rate of 34%. The firm faces EBIT scenarios of recession and boom. { Note: EBIT = earnings before interest and tax, $ Interest = dollar amount of interest owed on the debt, NIBT = net income before tax, NI= net income, EPS= earnings per share, and RRE = rate of return on equity\} If Sinclair's leverage factor is 4 , what amount comes closest to the amount of debt issued? 2,5004,0005,0006,5007,500
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