Suppose the tax rate on interest income is 35 , and the average tax rate on capital gains and dividend income is 10 How high must the marginal corporate tax rate be for debt to offer a tax advantage ...

The average tax on capital gains is those tax rates that are applied to assets for more than a year ...

Suppose the tax rate on interest income is 35%, and the average tax rate on capital gains

Question:

Suppose the tax rate on interest income is 35%, and the average tax rate on capital gains and income is 10%. How high must the marginal corporate tax rate be for debt to offer a tax advantage?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...