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

question 85

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 hold Google stock in retirement accounts that are free from personal taxes.If Google were to issue sufficient debt to reduce its taxes by $600 million per year permanently,then the value that would be created is closest to:

• A)$6.4 billion.
• B)$8.6 billion.
• C)$9.8 billion.
• D)$14.3 billion.

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Definitions:

Work-related Transactions

The interactions or exchanges between employees and employers or among colleagues related to the tasks and objectives of their work.

Performance-oriented Values

Cultural or organizational priorities that emphasize achievement, results, and competence in task execution.

GLOBE Model

A conceptual model aimed at comprehending the link between cultural aspects and the effectiveness of societies, organizations, and leaders globally.

Leader's Influence

The impact a leader has on shaping the behavior, attitudes, and performance of others.