Explain why the author uses the following formula to explain the amount of money a firm needs to repay an outstanding principal balance.Support your answer with n example that shows how much in EBT a firm in a 30% tax bracket would require to repay $1,000 in principal.
Before-tax cost of debt repayment = (principal repayment)/ (1 - tax rate)

Question

Quizplus · Accepted Answer

The Answer of Explain why the author uses the following formula to explain the amount of money a firm needs to repay an outstanding principal balance.Support your answer with n example that shows how much in EBT a firm in a 30% tax bracket would require to repay $1,000 in principal.
Before-tax cost of debt repayment = (principal repayment)/ (1 - tax rate)

Explain Why the Author Uses the Following Formula to Explain