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...... Burleigh Evatt argues that debt can impact shareholder value in several means, such as changes in the nominal interest rates which materialize in modifications upon the present value of operating cash flows, outstanding debt, the market cost of capital or product demand. Yet, he does not state the direction these modifications will follow. Another specification that has to be made refers to the priority of paying the debt, in the meaning that the notes must be paid first, whereas the dividends do not constitute for obligations (Blurt It, 2009). This will additionally generate shareholder dissatisfactions
b) Debts impact on key profitability ratios
EBITD (earnings before interest, tax and depreciation) = revenues expenses
EBITD = 450 x 1.32 (the increase from the investment) 75 (selling and administrative expenses) 107.8 (costs of the investment) = 411.2 million; comparative to the 300 EBITD (EBIT plus depreciation), this profitability ratio registers a net increase
ROA (return on assets) = net income / total assets = 490 x 1.32 / 2,000 = 0.3234, this is higher comparative to the current ROA of only 0.245 (490 / 2000), meaning that the investment will increase KPs profitability relative to its assets (Investopedia, 2009)

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