Assume That the Firm's Gain from Leverage According to the Miller

question 40

Multiple Choice

Assume that the firm's gain from leverage according to the Miller model is $126,667.If the effective personal tax rate on stock income is T_S = 20%,what is the implied personal tax rate on debt income?

• A)18.2%
• B)20.2%
• C)22.5%
• D)25.0%

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