Multiple Choice
Consider the M&M world of corporate taxes.The interest expense is $10 million,the corporate tax rate is 20%,and the discount rate on the tax shield is 10%.What is the gain to leverage or the value added from issuing debt?
A) $19 million
B) $20 million
C) $29 million
D) $30 million
Correct Answer:
Verified
Correct Answer:
Verified
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