Question
A small business owner is weighing her option in raising $30,000 from debt or equity. The corporate tax rate is 21%. The business can receive
A small business owner is weighing her option in raising $30,000 from debt or equity. The corporate tax rate is 21%. The business can receive an interest only bank loan for $30,000 at 4%.
requirement:
a. what is the after-tax cost of the bank loan for a 1 year period?
b. would the bank loan be consider Debt or Equity?
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Introduction To Estimating Economic Models
Authors: Atsushi Maki
1st Edition
0415589878, 978-0415589871
