Large Corp.anticipates issuing $5,000,000 of debt to repurchase equity.If Large can issue the debt to yield 8% per year,then what is the single year increase in cash flow to Large if it issues the debt and is subject to a 34% marginal tax rate?
A) $136,000
B) $400,000
C) $2,720,000
D) none of the above
Correct Answer:
Verified
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