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:

Publicly Listed

Pertains to a company or entity whose shares are traded on a stock exchange, allowing public investors to buy and sell its stock.

Telephone Numbers

Unique sequences of digits assigned for communication over telephone networks, essential for identifying participants in studies involving telephonic surveys.

Volunteer Sample

A sampling technique where participants are selected based on their willingness to volunteer, potentially leading to biased results.

Activism

The practice of campaigning or taking action to bring about political or social change.