Other things remaining the same, an increase in the tax rate on corporate profits will

make debt relatively cheaper

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make debt relatively less cheap home

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no impact on the cost of debt

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we can't say

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Solution

The correct option is A
make debt relatively cheaper

If the tax on corporate, profit will increase it makes debt relatively cheaper.

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Similar questions

Other things remaining the same, an increase in the tax rate on corporate profit will

(a) make the debt relatively cheaper

(b) make the debt relatively the dearer

(d) we can't say

___ rises with an increase in debt, only when the ROI is more than the cost of debt.

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