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Bankruptcies

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In Slobovia, an obscure European country, dividends and interest are given the same tax treatment: they are both deductible at the corporate level and both taxed as income at the investor's level.

All else the same, where else would you expect more corporate bankruptcies, in Slobovia or in the U.S.? Explain.

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US will definitely see more bankruptcies. This is because unlike US, in Slobovia there is no incentive for the organization to have more debt in its ...

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