Use the Following Information to Answer the Question(s)below

question 71

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 in Google pay a 15% tax rate on income from equity and a 35% tax rate on interest income.If Google were to issue sufficient debt to reduce its taxes by $1 billion per year permanently,then the effective tax advantage of this debt would be closest to:

• A)10%.
• B)15%.
• C)25%.
• D)30%.

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Definitions:

Intragroup Relationships

The connections and interactions that occur between members within the same group or team.

Group Cohesion

The extent to which members of a group stick together and remain united in pursuit of common objectives.

Behaviors

The actions or reactions of an individual or a group in response to external or internal stimuli.

Group Leader

An individual who takes on the responsibility of guiding, directing, or influencing the members of a group towards achieving its objectives.