Pelamed Pharmaceuticals had EBIT of $354 million in 2018. In addition, Pelamed had interest expenses of $128.34

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Pelamed Pharmaceuticals had EBIT of $354 million in 2018. In addition, Pelamed had interest expenses of $128.34 million and a corporate tax rate of 25%.

a. What was Pelamed’s 2018 net income?

b. What was the total of Pelamed’s 2018 net income and interest payments?

c. If Pelamed had no interest expenses, what would its 2018 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 2018?

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Fundamentals Of Corporate Finance

ISBN: 9781292437156

5th Global Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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Question Posted: Feb 21, 2024 10:00 AM

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Pelamed Pharmaceuticals had EBIT of $354 million in 2018. In addition, Pelamed had interest expenses of $128.34

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Lets calculate each part of the problem Given EBIT Earnings Before Interest and Taxes 354 million I...View the full answer

Fundamentals Of Corporate Finance

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