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Fill the gaps for 1999.
Use 20 year Bond yield
What is the present value of tax shield with respect to EACH BOND GRADE?
Use the 5 yr CAGR for sales growth
Use the current EBIT/SALES ratio to calculate the EBIT for 1999
| | | 1999 Pro Forma |
| | Actual | No Debt | AAA | AA | A | BBB |
| Bond Yield | | | | | | |
| Sales | 1,423.2 | | | | | |
| EBIT | 753.3 | | | | | |
| Interest | (2.2) | | | | | |
| Pretax Earnings | 755.5 | | | | | |
| Taxes @ 38% | 287.6 | | | | | |
| Net Income | 467.9 | | | | | |
| Interest Coverage | | | | | | |
| Interest Coverage Needed | | | | | | |
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