A firm has an expected before tax earnings of 1000 a year


A firm has an expected before tax earnings of $1000 a year in perpetuity, The firm can borrow at the rate of 8%. The corporate tax rate is 40%. To ensure the tax deduction always being realised in the same year of the interest payment, the firm should not borrow more than the dollar amount of? 

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Finance Basics: A firm has an expected before tax earnings of 1000 a year
Reference No:- TGS01007562

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