Which of the Following Is the Condition for Compensating Taxable

Which of the following is the condition for compensating taxable investors for the relative tax disadvantage of debt interest payments?

A) The expected return of zero-beta equity equals the return on riskless debt.
B) The after-tax return on debt should equal the pre-tax zero-beta expected return on equity.
C) The pre-tax return on debt should exceed the pre-tax zero-beta expected return on equity.
D) The after-tax zero-beta expected return on equity should exceed the after-tax return on debt.