What would happen to M&A activity if the corporate tax rate dropped to 20%?

Answer

Mixed effects: (+) More foreign cash repatriation → more dry powder for acquisitions; (+) Higher after-tax earnings → higher equity valuations all else equal; (−) Tax shield on debt becomes less valuable (the interest deduction is worth less), so debt-funded deals are slightly less attractive; (−) Higher cash flows could push WACC down via lower cost of equity, but that's offset by lower tax shield value.