Question: Pelamed Pharmaceuticals has EBIT of $443 million in 2012. Inaddition, Pelamed has interest expenses of $190 million and a corporate tax rate of 40%. a.

Pelamed Pharmaceuticals has EBIT of $443 million in 2012. Inaddition, Pelamed has interest expenses of $190 million and a corporate tax rate of 40%.

a. What isPelamed's 2012 netincome?

b. What is the total ofPelamed's 2012 net income plus interestpayments?

c. If Pelamed had no interestexpenses, what would its 2012 net incomebe? How does it compare to your answer in

part (b)?

d. What is the amount ofPelamed's interest tax shield in2012?

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