Given the Following Information, Leverage Will Add How Much Value

question 42

Multiple Choice

Given the following information, leverage will add how much value to the unlevered firm per pound of debt?
Corporate tax rate: 30%
Personal tax rate on income from bonds: 20%
Personal tax rate on income from shares: 0%

• A)£0.125
• B)£0.472
• C)£0.528
• D)£0.825
• E)None of the above.

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