Effective Tax Advantage of Debt

t* = (1 - ti) - (1 - tc)(1 - te)

When there are no personal taxes, or when the personal tax rates on debt and equity income are the same (ti = te), this formula reduces to t* = tc. But when equity income is taxed less heavily (ti 7 te ), then t* is less than tc .

can you show me the steps to get t*=tc because when I do it

I get t* = -tc

if we assume ti= 0 =te