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Kito electronics has an EBIT of $200,000 a growth rate of 6% and a tax rate of 40%

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Question;Kito electronics has an EBIT of $200,000 a growth rate of 6% and a tax rate of 40%. In order to grow Kito must receive 20% of EBIT on net optional assets. Kito has $300,000at 8% debt outstanding and a similar company with no debt has accost of equity of 11%.;According to MM extension with growth what is the value of Kito?s tax shields.

 

Paper#50310 | Written in 18-Jul-2015

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