Question: A business in the 45 tax bracket is considering borrowing

A business in the 45% tax bracket is considering borrowing money at 10%.
a. What is the after-tax interest rate on the debt?
b. What is the after-tax interest rate if only half of the interest expense is allowed as a tax deduction?
c. Would your answer change if the firm is losing money now and does not expect to have taxable income for three years?

View Solution:


Sale on SolutionInn
Sales0
Views189
Comments
  • CreatedApril 15, 2015
  • Files Included
Post your question
5000