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Chapter 24: Q4. Suppose that dividend yield is 6%, depreciation is 12%, and the corporate tax rate is 35%. What would be the marginal cost

Chapter 24: Q4. Suppose that dividend yield is 6%, depreciation is 12%, and the corporate tax rate is 35%. What would be the marginal cost of each dollar of machinery investment under the following situations:

a. Firms are allowed to expense the machine.

b. There is an investment tax credit of 8%.

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