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13% =K1 5/7 = Debt to total MKT Val. Ratio 8.0% = i before tax borrowing 40% Marginal corp inc. Tax rate If the federal

13% =K1

5/7 = Debt to total MKT Val. Ratio

8.0% = i before tax borrowing

40% Marginal corp inc. Tax rate

If the federal government cut the marginal corporate income tax rate to 21%, what would happen to the debt to total market value ratio?

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