Your companys optimal (and current) capital structure is 50 percent equity and 50 percent debt. Its earnings before interest and taxes (EBIT) are projected to be $34.667 million for the year. The company has $200 million of assets; its average interest rate on outstanding debt is 10 percent; and its tax rate is 40 percent. How much interest will the company pay on the existing debt?

Question 8 options:

	$10 million
	$4 million
	$6 million
	$8 million

Your companys optimal (and current) capital structure is 50 percent equity and 50 percent debt. Its earnings before interest and taxes (EBIT) are projected to be $34.667 million for the year. The company has $200 million of assets; its average interest rate on outstanding debt is 10 percent; and its tax rate is 40 percent. What will the net income be?

Question 9 options:

	$17.2 million
	$14.8 million
	$20 million
	$16 million

Your companys optimal (and current) capital structure is 50 percent equity and 50 percent debt. Its earnings before interest and taxes (EBIT) are projected to be $34.667 million for the year. The company has $200 million of assets; its average interest rate on outstanding debt is 10 percent; and its tax rate is 40 percent. Your company has decided that its capital budget during the coming year will be $20 million. If it follows the residual dividend policy and maintains the same capital structure, what will its dividend payout ratio be?

Question 10 options:

	37.5%
	32.43%
	42%
	25%