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Google Corporation had no debt on its balance sheet in 2008, but paid $1.6 billion...

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Google Corporation had no debt on its balance sheet in 2008, but paid $1.6 billion in taxes. Assume that Google's marginal tax rate is 35% and Google's borrowing cost is 7% Assume that investors in Google pay a 15% tax rate on income from equity and a 35% tax rate on interest income. If Google were to issue sufficient debt to reduce its corporate taxes by $1 billion per year permanently, then the value that would be created is closest to: $6.4 billion $14.3 billion $9.8 billion $8.6 billion

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