Given the Following Information,leverage Will Add How Much Value to the Unlevered

question 26

Multiple Choice

Given the following information,leverage will add how much value to the unlevered firm per dollar of debt?
Corporate tax rate: 35%
Personal tax rate on income from bonds: 25%
Personal tax rate on income from stocks: 30%

• A) $-0.625
• B) $0.287
• C) $0.393
• D) $0.635
• E) None of these.

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