The EBIT for Carls's company is $1,000 and the EBIT for marth's company is $1,000. Carls's company is fully financed with equity and marth's company uses debt to finance 40% of its assets. The tax rate is identical for the two companies. Which company will have the higher net income?

Answer rating: 100% (QA)

To determine which company will have the higher net income we need to calculate the net income for e... View the full answer