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The CFO of A&A Brothers has suggested that the company should issue $ 3 0 0 million worth of common stock and use the proceeds

The CFO of A&A Brothers has suggested that the company should issue $

300

million worth of common stock and use the proceeds to reduce some of the company

s outstanding debt. Assume that the company adopts this policy and that total assets and operating income

(

EBIT

)

remain the same. The company

s tax rate will also remain the same. What will happen to net income?

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