Explore BrainMass

Explore BrainMass

    unlevered firm per dollar of debt

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Given the following information, leverage will add how much value to the unlevered firm per dollar of debt?

    Corporate tax rate: 34%
    Personal tax rate on income from bonds: 50%
    Personal tax rate on income from stocks: 10%

    a. $-0.050
    b. $-0.188
    c. $0.188
    d. $0.633
    e. None of the above.

    © BrainMass Inc. brainmass.com December 24, 2021, 5:10 pm ad1c9bdddf
    https://brainmass.com/business/interest-rates/unlevered-firm-per-dollar-of-debt-32703

    Solution Preview

    e. None of the above. Leverage will add 34% value to the unlevered firm per dollar of debt. Please note that the corporate tax is the only rate relevant ...

    Solution Summary

    Unlevered firm per dollar of debt is calculated.

    $2.49

    ADVERTISEMENT