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:

Productivity

A measure of the efficiency of production, often expressed as the ratio of outputs to inputs in the production process.

Security

Measures and protocols implemented to protect people, property, and information from harm, theft, or unauthorized access.

Service Quality

A measure of how well the service level delivered matches customer expectations.

Philip Crosby

An American businessman and author, known for promoting concepts related to quality management such as "zero defects" and the cost of quality.