a. What is the effective tax advantage of debt if PMF has interest expenses of $5 million this coming year? If PMF has interest expenses of $5 million this coming year, the effective tax advantage is___%. (Round to one decimal place.) b. What is the effective tax advantage of debt for interest expenses in excess of $20 mllion? (lgnore carryforwards). For interest expenses in excess of $20 million, the effective tax advantage is___%.(Round to one decimal place.) c. What is the expected effective tax advantage of debt for interest expenses between $6 million and $13 mllion? (lgnorecarryforwards). The expected effective tax advantage of debt for interest expenses between $6 million and $13 mllion is___%. (Round to onedecimal place.)

d. What level of interest expense provides PMF with the greatest tax benefit? (Select the best choice below.) A. Between $6 million and $13 million B. $20 million and over C. $6million D. The interest expense does not matter because the tax benefit is aways the same.

E. Up to $6 million

PMF, Inc., can deduct interest expenses next year up to 30% of EBIT. This limit is equally likely to be $6 million, $13 million, or $20 million. Its corporate tax rate is 38%, and investors pay a 25% tax rate on income from equity and a 45% tax rate on interest income. a. What is the effective tax advantage of debt if PMF has interest expenses of $5 million this coming year? b. What is the effective tax advantage of debt for interest expenses in excess of $20 million? (Ignore carryforwards). c. What is the expected effective tax advantage of debt for interest expenses between $6 million and $13 million? (Ignore carryforwards). d. What level of interest expense provides PMF with the greatest tax benefit