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a . What is the relative tax advantage of corporate debt if the corporate tax rate is Tc = 0 . 2 4 , the

a. What is the relative tax advantage of corporate debt if the corporate tax rate is Tc =0.24, the personal tax rate is Tp =0.10, but all equity income is received as capital gains and escapes tax entirely (TpE =0)?(Do not round intermediate calculations. Round your answer to 4 decimal places.)
b. How does the relative tax advantage change if the company decides to pay out all equity income as cash dividends that are taxed at 26%?(Do not round intermediate calculations. Round your answer to 4 decimal places.)

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