If a firm's marginal tax rate is increased, this would, other things held constant, lower the cost of debt used to calculate its
1 answer:
Answer:
The answer is "True".
Explanation:
The marginal rate is indeed the extra income tax about any dollar earned as income. Its annual tax rate is the total tax paid divided by the total earnings. This marginal rate of 10% will impose a tax of 10 cents on every following income spent. that's why the given statement is true because the cost of debt and its t value will increase the cost of the decrease.
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Answer:
The correct answer is D.
Explanation:
Equity = $231,000
No. of outstanding shares = 5,000
Price of share =
Price of share = $46.2
Repurchased shares worth $18,000
No. of shares repurchased =
No. of shares repurchased = 390
When the shares would have been repurchased then the value of equity would decrease by the same amount.
Revised equity = $231,000 - $18,000
Revised equity = $213,000
No. of shares outstanding = 5,000 - 390
No. of shares outstanding = 4,610
Thus, the price of each share would be:
Share price =
Share price = $42.60