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The EBIT for Firm A is $2,000 and the EBIT for firm B is also $2,000. Firm A is fully financed with equity and Firm

The EBIT for Firm A is $2,000 and the EBIT for firm B is also $2,000. Firm A is fully financed with equity and Firm B uses debt to finance 30% of its assets. The tax rate is identical for the two firms. Which firm will have the higher net income?

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