Question

Assume that personal and corporate taxes are given by TC = (corporate tax rate) = 30 percent: TPS
personal tax rate on equity income = 25 percent; and TPB = personal tax rate on interest income = 40
percent. By how much will the value of the firm change if it issues $1 million in debt and uses the
proceeds to repurchase equity?
Select one
оа 0.875
Ob 0.125
OC 0.30
Od 1.00
о е
None of the above
C
O

Answer 1

Answer:

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Explanation:

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