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

question 47

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 $1 billion per year permanently,then the amount that Google needs to borrow is closest to:

• A)$14.25 billion.
• B)$22.00 billion.
• C)$24.50 billion.
• D)$40.75 billion.

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Definitions:

Social Inequality

Exists when certain attributes affect a person’s access to socially valued resources.

Individual Attributes

The characteristics or qualities that define a person, such as physical features, personality traits, and abilities.

Economic Classes

Categories of people within a society who share similar socio-economic statuses, often determined by income, wealth, occupation, and education.

Ownership of Property

The legal right or interest that an individual or entity has in an asset, including tangible and intangible assets.