A company has a tax rate of 40%.Leverage would be beneficial for the company for each of the following combinations of interest rates and ROA except:
$$\begin{array} { | l | c | c | }
\hline & \begin{array} { c }
\text { Interest } \
\text { rate }
\end{array} & \text { ROA } \
\hline \text { a. } & 4 \% & \mathbf { 6 \% } \
\hline \text { b. } & \mathbf { 6 \% } & \mathbf { 6 } \% \
\hline \text { c. } & 14 \% & 10 \% \
\hline \text { d. } & 16 \% & 10 \% \
\hline
\end{array}$$

Question

A company has a tax rate of 40%.Leverage would be beneficial for the company for each of the following combinations of interest rates and ROA except:
$$\begin{array} { | l | c | c | } 
\hline & \begin{array} { c } 
\text { Interest } \
\text { rate }
\end{array} & \text { ROA } \
\hline \text { a. } & 4 \% & \mathbf { 6 \% } \
\hline \text { b. } & \mathbf { 6 \% } & \mathbf { 6 } \% \
\hline \text { c. } & 14 \% & 10 \% \
\hline \text { d. } & 16 \% & 10 \% \
\hline
\end{array}$$

Quizplus · Accepted Answer

The Answer of A company has a tax rate of 40%.Leverage would be beneficial for the company for each of the following combinations of interest rates and ROA except:
$$\begin{array} { | l | c | c | } 
\hline & \begin{array} { c } 
\text { Interest } \
\text { rate }
\end{array} & \text { ROA } \
\hline \text { a. } & 4 \% & \mathbf { 6 \% } \
\hline \text { b. } & \mathbf { 6 \% } & \mathbf { 6 } \% \
\hline \text { c. } & 14 \% & 10 \% \
\hline \text { d. } & 16 \% & 10 \% \
\hline
\end{array}$$

A Company Has a Tax Rate of 40