P10-20 (similar to) Question Help will pay an adation 20 Suppose the corporate tax rate is 21% and investors pay a lax rate of 20% on income from dividends or capital gains and a tax rate of 30% on interest income. Your firm decides to add debts million in interest each year. It will pay this interest expense by cutting its dividend a. How much will det holders receive after paying taxes on the interest they cam? b. By how much will the firm need to cut its dividend each year to pay this interest expense? c. By how much will this out in the dividend reduce equily holders annual hertax income? d. How much less will the government receive in total tax revenues each year? e. What is the effective tax advantage of debt"? a. How much will det holders receive after paying taxes on the interest they camn? After paying taxes on the interest, det holders will receive million (Round to two decimal places) P15-20 (similar to) Question Help Suppose the corporate tax rate is 21%, and investors pay a face of 20% on income from dividends of capital gains and a tax rate of 33% on interest income. Your firm decides to add debt so it will pay an additional $20 milion in interest each year, will pay this interest expense by cutting its dividend a. How much wil det holders receive after paying taxes on the interest they earn? b. By how much will the firm need to cut a dividend each year to pay this interest expense? c. By how much will this out in the dividend reduce guy holders annual tax income? d. How much less will the government receive in total tax revenues each year? e. What is the fiective tax advantage of debt ? a. How much will det holders receive after paying taces on the interest they earn? After paying taxes on the interest debt holders will receive million (Round to two decimal places) P10-20 (similar to) Question Help will pay an adation 20 Suppose the corporate tax rate is 21% and investors pay a lax rate of 20% on income from dividends or capital gains and a tax rate of 30% on interest income. Your firm decides to add debts million in interest each year. It will pay this interest expense by cutting its dividend a. How much will det holders receive after paying taxes on the interest they cam? b. By how much will the firm need to cut its dividend each year to pay this interest expense? c. By how much will this out in the dividend reduce equily holders annual hertax income? d. How much less will the government receive in total tax revenues each year? e. What is the effective tax advantage of debt"? a. How much will det holders receive after paying taxes on the interest they camn? After paying taxes on the interest, det holders will receive million (Round to two decimal places) P15-20 (similar to) Question Help Suppose the corporate tax rate is 21%, and investors pay a face of 20% on income from dividends of capital gains and a tax rate of 33% on interest income. Your firm decides to add debt so it will pay an additional $20 milion in interest each year, will pay this interest expense by cutting its dividend a. How much wil det holders receive after paying taxes on the interest they earn? b. By how much will the firm need to cut a dividend each year to pay this interest expense? c. By how much will this out in the dividend reduce guy holders annual tax income? d. How much less will the government receive in total tax revenues each year? e. What is the fiective tax advantage of debt ? a. How much will det holders receive after paying taces on the interest they earn? After paying taxes on the interest debt holders will receive million (Round to two decimal places)