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Question: a company has positive net income and no debt if...

Question details

A company has positive net income and no debt. If the effective tax rate of the company were to instantaneously change from 30% to 20%. Which of the following statements is (are) TRUE:

I. FCFF would increase

II. FCFE would increase by the same amount as FCFF

III. WACC would increase

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A. I

B. II

C. I, III

D. I, II, III

E. None of the statements

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