The all equity firm it has no debt and so pays no interest


The all equity firm (it has no debt and so pays no interest) has shareholders who require 10% return on their invested capital. All of the firm’s capital is tied up in operating activities. The firm’s ROIC = 16%. Earnings before tax is $100 and the firm’s tax rate is 40%. What is the firm’s NOPAT and Economic Profit?

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Financial Management: The all equity firm it has no debt and so pays no interest
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