In Miller's Model, When Personal Tax Rate on Income from Bonds

question 5

Multiple Choice

In Miller's model, when Personal tax rate on income from bonds is equal to the personal tax rate on income from stocks:

• A) relative advantage of debt depends only on the corporate tax rate
• B) relative advantage of debt depends only on the personal tax rate on interest income
• C) relative advantage of debt depends only on the personal tax rate on income from equity
• D) none of the above

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