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Nature, need and significance of business finance - class-XI
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Other things remaining the same, an increase in the tax rate on corporate profits will __________________.
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A
Make debt relatively cheaper
💡 Explanation:
Where there is an increase in the tax on corporate profit, the debt becomes relatively cheaper. This is because interest rate is to be paid to the debtors is deducted from the total income before calculating the value of tax. Thus, as the valueof tax increases, the debt becomes relatively cheaper.