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How much additional debt can ring inc issue the year

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Reference no: EM132708356

Problem 1: Given its current leverage level, Ring Inc. is expected to have a net income of $9.5 million next year. If the company has a cost of debt of 8 Percent and has a 30 percent corporate tax rate, then how much additional debt can Ring Inc issue this year and still get the interest tax shield benefit next year?

Reference no: EM132708356

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