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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 TS
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 TS = 20%, what is the implied personal tax rate on debt income? If the following is true: EBIT: $100,000 rd: 12% Tc: 30% Debt: $500,000 rsU: 16%
a)16.4%
b)18.2%
c)20.2%
d)22.5%
e)25.0%
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