Use the Following Information to Answer the Question(s)below

question 71

Multiple Choice

Use the following information to answer the question(s) below.
Google Corporation has no debt on its balance sheet in 2008,but paid $1.6 billion in taxes.Assume that Google's marginal tax rate is 35% and Google's borrowing cost is 7%.
-Assume that investors in Google pay a 15% tax rate on income from equity and a 35% tax rate on interest income.If Google were to issue sufficient debt to reduce its taxes by $1 billion per year permanently,then the effective tax advantage of this debt would be closest to:

• A)10%.
• B)15%.
• C)25%.
• D)30%.

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Definitions:

Interconnected Tasks

Tasks that are linked or related in such a way that the completion of one can affect the execution of others.

Behaviors

Observable actions or reactions of individuals, often in response to their environment or internal states.

Expect

To regard something as likely to happen or believe that something or someone will arrive or occur.

Role Conflict

Occurs when there are incompatible demands placed upon a person relating to their job or position.