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What impact could decision have on the financial statements

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Problem 1: President and Chairman of Sky Company plan to have the company issue $700 million of new equity and use the proceeds to pay off some of its outstanding debts. Assume that the company, which does not pay any dividends, takes this action, and that total assets, operating income, and its tax rate all remain constant. What impact could this decision have on the financial statements of the company? Explain with reasoning.

Reference no: EM132698185

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