Which of the following statements is FALSE?
A) To determine the true tax benefit of leverage, we need to evaluate the combined effect of both corporate and personal taxes.
B) A personal tax disadvantage for debt causes the WACC to decline more slowly with leverage than it otherwise would.
C) Personal taxes have an indirect effect on the firm's weighted average cost of capital.
D) In the United States and many other countries, capital gains from equity have historically been taxed more heavily than interest income.
D
Explanation: D) In the United States and many other countries, capital gains from equity have historically been taxed at a lower rate than interest income.
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An employee who earns a base rate of $10 an hour and receives a weekly attendance award of $20 works 50 hours this week (Overtime pay is required, whether or not the employer specifically asked or expected the employee to work more than 40 hours). His/her total compensation for the week will be:
A. $550.00. B. $557.50. C. $570.00. D. $577.50. E. $505.00.
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