Your company’s optimal (and current) capital structure is 50 percent equity and 50 percent debt. Its earnings before interest and taxes (EBIT) are projected to be $34.667 million for the year. The company has $200 million of assets; its average interest rate on outstanding debt is 10 percent; and its tax rate is 40 percent. How much interest will the company pay on the existing debt?

Answer rating: 100% (QA)

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