Principles of Corporate Finance

Example 2
All Debt All Equity
Income BTCP 1.00 1.00
less TC=.34 0.00 0.34
Income BTP 1.00 0.66
Taxes TP =.28 TPE=.21 0.28 0.139
After Tax Income 0.72 0.521

RAF = 1.381 Advantage Debt

C.S. & Taxes (Personal & Corp)