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

question 97

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 25% tax rate on interest income.If Google were to issue sufficient debt to reduce its taxes by $600 million 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:

White-Skinned

Description of a person having a fair or pale complexion, often used in discussions about race and ethnicity.

Immigrants

People who move to a foreign country with the intention of settling there, often for reasons such as seeking better living conditions or employment opportunities.

Institutionalize

The process of embedding something within an established system or societal norm, making it a recognized and structured part of that system.

Manages Identity

The process of controlling and shaping the public perception of an individual, organization, or product.