Multiple Choice
Given the following information, leverage will add how much value to the unlevered firm per dollar of debt? Corporate tax rate: 40%
Personal tax rate on income from bonds: 20%
Personal tax rate on income from stocks: 30%
A) $-0.475
B) $0.475
C) $0.525
D) $0.633
E) None of the above
Correct Answer:
Verified
Correct Answer:
Verified
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