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Effects on Capital Structure if Congress changed tax rates

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If Congress increased the personal tax rate on dividends and capital gains but simultaneously reduced the rate on corporate income, what effect would this have on the average company's capital structure?

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Solution Summary

The effects on capital structure if congress changed tax rates are examined. The rates are increased in dividend and capital gains.

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If Congress increases the personal tax rate on dividends and capital gains, but simultaneously reduced the rate on corporate income the effect would depend on the total impact of the simultaneous rate changes. For example, if ...

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