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Haricot Corp. and Pinto Corp. both have operating profits of $100 million. Haricot is financed...

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Accounting

Haricot Corp. and Pinto Corp. both have operating profits of $100 million. Haricot is financed solely by equity, while Pinto has issued $150 million of 8% debt. If the corporate tax rate is 21%: Required: a. How much tax does each company pay? b. What is the total payout to investors (debtholders plus shareholders) of each company?

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