If a companys bonds bear an interest rate of 8 the tax rate


If a company's bonds bear an interest rate of 8%, the tax rate is 30%, and the company's assets are generating an after-tax return of 7%, then the leverage would be a. Positive   b. Negative   c. Neither positive or negative d. Impossible to determine without knowing the return on common stockholders' equity.

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Financial Accounting: If a companys bonds bear an interest rate of 8 the tax rate
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