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Category > Business & Finance Posted 27 May 2017 My Price 5.00

What is the relative tax advantage of corporate debt if the corporate tax rate

a.

What is the relative tax advantage of corporate debt if the corporate tax rate is Tc = 0.39, the personal tax rate is Tp = 0.35, but all equity income is received as capital gains and escapes tax entirely (TpE = 0)? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

  

  Relative tax advantage  

  

b.

How does the relative tax advantage change if the company decides to pay out all equity income as cash dividends that are taxed at 15%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
 
 

 

Answers

Alpha Geek
(8)
Status NEW Posted 27 May 2017 01:05 PM My Price 5.00

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file 1495891938-Answer.docx preview (140 words )
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