Given the Following Information, Leverage Will Add How Much Value

question 7

Multiple Choice

Given the following information, leverage will add how much value to the unlevered firm per dollar of debt? Corporate tax rate: 40%
Personal tax rate on income from bonds: 20%
Personal tax rate on income from stocks: 30%

• A)$-0.475
• B)$0.475
• C)$0.525
• D)$0.633
• E)None of the above

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