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Assume the current corporate income tax rate is 0%. If the rate were increased to 15%, how would this impact the after-tax cost of debt?
Assume the current corporate income tax rate is 0%. If the rate were increased to 15%, how would this impact the after-tax cost of debt? All else equal, would firms be more or less likely to issue debt as opposed to equity? After-tax cost of debt increases; firms are more likely to issue debt After-tax cost of debt decreases; firms are less likely to issue debt After-tax cost of debt decreases; firms are more likely to issue debt After-tax cost of debt increases; firms are more likely to issue debt
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