Question: Round your final answer to 4 decimal places. Do not enter your answers in percentage. All answers are in decimal. Which of the following is

Round your final answer to 4 decimal places. Do not enter your answers in percentage. All answers are in decimal.

Which of the following is correct. Financial leverage increases firm value when:

A. tax rate on interest income equals to corporate tax rate.

B. there is no tax.

C. tax rate on equity income equals to corporate tax rate.

D. tax rate on interest income equals to tax rate on equity income.

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