Loveless Electrical Products Company has $4 million in debt outstanding. The corporate income tax rate is 35 percent. In an extensive study of investors, G. Rosenberg and Associates, an outside consulting firm, has estimated that the marginal personal tax rate on common stock income for investors overall is 25 percent. Dividends and capital gains are both included in this income. The firm also has estimated that the marginal personal tax rate on debt income is 30 percent.