(Answered) Assume that the firms gain from leverage according to the

Finance

Assume that the firm's gain from leverage according to the Miller model is $126,667. If the effective personal tax rate on stock income is TS = 20%, what is the implied personal tax rate on debt income? If the following is true:

EBIT: $100,000rd: 12%Tc: 30%

Debt: $500,000rsU: 16%

16.4%
18.2%
20.2%
22.5%
25.0%

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