Barclays Deck
A company raises $100 of debt at the start of the year. Walk through the three statements at issuance, and then the ongoing impact if it pays 10% interest (40% tax rate).
Model answer
At issuance: nothing hits the income statement. Cash flow statement: +$100 inflow under financing activities, so cash is up $100. Balance sheet: cash (asset) up $100, debt (liability) up $100 — it…
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