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%