If Congress wants to stimulate the economy, explainhow it might alter each of the following: (a) personaland corporate tax rates, (b) depreciation expenseschedules, and (c) the differential between the taxrate on personal income and long-term capitalgains. How would these changes affect corporateprofitability and free cash flow? How would theyaffect investors’ choices regarding which securities to hold in their portfolios? Might any of theseactions affect the general level of interest rates?

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Q: If the corporate tax rate is greater than zero, how would taxes affect the firm's cost of capital?

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A: Cash is paid in terms of dividends.

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Q: Consumer prices will increase

A: Correct Answer is :- A Consumer price will increase

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Q: political risk to a company's bottom line?

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Q: What is meant by the goal of maximization of shareholder wealth?

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