Pelamed Pharmaceuticals had EBIT of $325 million in 2013. In addition, Pelamed had interest expenses of $125

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Pelamed Pharmaceuticals had EBIT of $325 million in 2013. In addition, Pelamed had interest expenses of $125 million and a corporate tax rate of 40%.

a. What was Pelamed's 2013 net income?

b. What was the total of Pelamed's 2013 net income and interest payments?

c. If Pelamed had no interest expenses, what would its 2013 net income have been? How does it compare to your answer in part (b)?

d. What was the amount of Pelamed's interest tax shield in 2013?

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Fundamentals Of Corporate Finance

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Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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Question Posted: Oct 25, 2016 11:09 AM

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Pelamed Pharmaceuticals had EBIT of $325 million in 2013. In addition, Pelamed had interest expenses of $125

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Plan We can find the net income of the firm using the EBIT interest e...View the full answer

Fundamentals Of Corporate Finance

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