All Else the Same, Which of the Following Is True

Multiple Choice

All else the same, which of the following is true about the interest tax shield of a firm with positive EBIT?

A) The higher the corporate tax rate, the less valuable the interest tax shield.
B) If the firm dramatically increases its depreciation expense, it may have more of a need for an interest tax shield.
C) The interest tax shield becomes more valuable as the size of the debt load increases.
D) The interest tax shield increases as a firm reduces its level of outstanding debt.
E) Since the interest tax shield is valuable, the firm would rather pay a high coupon rate on its bonds than a low coupon rate.