All else being equal, if a firm issues $100 million in 10% bonds and uses the proceeds

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All else being equal, if a firm issues $100 million in 10% bonds and uses the proceeds to repurchase common stock that pays dividends of $10 million per year, all of the following will occur, except:

A. income taxes will decrease

B. interest expense will increase

C. net income will decrease

D. net cash available for other needs will decrease

Related Book For answer-question

Auditing a business risk appraoch

ISBN: 978-0324375589

6th Edition

Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston

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Posted Date: Oct 04, 2018 04:06 AM

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All else being equal, if a firm issues $100 million in 10% bonds and uses the proceeds

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D net cash available for other needs will decrease Interest expense on bond will increase the ... View the full answer

Auditing a business risk appraoch

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