Multiple Choice
Given the following information,leverage will add how much value to the unlevered firm per dollar of debt?
Corporate tax rate: 34%
Personal tax rate on income from bonds: 50%
Personal tax rate on income from stocks: 10%
A) $-0.050
B) $-0.188
C) $0.188
D) $0.633
E) None of these.
Correct Answer:
Verified
Correct Answer:
Verified
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