Gomez Computer Systems Has an EBIT of $200,000, a Growth

question 16

Multiple Choice

Gomez computer systems has an EBIT of $200,000, a growth rate of 6%, and its tax rate is 40%. In order to support growth, Gomez must reinvest 20% of its EBIT in net operating assets. Gomez has $300,000 in 8% debt outstanding, and a similar company with no debt has a cost of equity of 11%.
-According to the MM extension with growth, what is the value of Gomez's tax shield?

• A) $156,385
• B) $164,616
• C) $173,280
• D) $182,400
• E) $192,000

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Definitions:

Neurotransmitter

Chemical messengers that transmit signals across a chemical synapse from one neuron to another target neuron, muscle cell, or gland cell.

Acetylcholinesterase

An enzyme that breaks down the neurotransmitter acetylcholine, playing a critical role in muscle function and neural transmission.

Synaptic Cleft

The gap between neurons where neurotransmitters are released and received, facilitating neuronal communication.

Continuous Stimulation

The persistent activation of a nerve, muscle, or part of the body, typically leading to adaptation or decreased response over time.