Question 3 (0.75 points)

A company has $ 500,000 in perpetual bonds outstanding. Its tax rate is 45%. Calculate the debt-related tax benefit according to Miller (1977), if investors are taxed 12% on bond income and are not taxed on equity income.

Question 3 options:

$ 187,500

$ 275,250

$ 265,300

$ 270,833,333

$ 180,450

Question 17 (0.5 points)

The Government of New Brunswick grants an interest-free debt to the SME KCI inc. to finance a project. This loan has an influence on the VANA of the project

Options for question 17:

True

False