Which is of the following is correct? a. When tax shield on debt is exactly offset by
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Question:
Which is of the following is correct?
a. When tax shield on debt is exactly offset by higher personal taxes paid on interest income, there is no tax value gain from leverage.
b. When personal tax rate on earnings is same as personal tax rate on debt, there is no tax value gain from leverage.
c. Value gain from leverage decreases as (personal tax rate on debt - personal tax rate on earnings) increases.
d. a and b.
e. a and c.
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date: