Delta company has earnings before interest and taxes

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Delta Company has earnings before interest and taxes (EBIT) of $1,000,000, and currently has $10,000,000 in equity and $0 in debt. Delta Company is considering a 60% debt ratio, and at this level, could acquire capital at 9% interest. The applicable tax rate is 40%. Find Delta Company’s net income at a 60% debt level.

Reference no: EM131070549

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