What is the gain from leverage for Bavarian Brew if the corporate tax rate equals 34%.In addition,assume that the personal tax rate on interest income equals 40% and that there is no tax on dividend income.

Name: What is the gain from leverage for Bavarian Brew if the corporate tax rate equals 34%.In addition,assume that the personal tax rate on interest income equals 40% and that there is no tax on dividend income.
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Quizplus · Accepted Answer

{1-(1-.34)(1-0)/(1-.4)}(1,000,000)= -$100,000

What Is the Gain from Leverage for Bavarian Brew If