Multiple Choice
The interest tax shield has no value for a firm when: I.the tax rate is equal to zero.
II) the debt-equity ratio is exactly equal to 1.
III) the firm is unlevered.
IV) a firm elects 100% equity as its capital structure.
A) I and III only.
B) II and IV only.
C) I, III, and IV only.
D) II, III, and IV only.
E) I, II, and IV only.
Correct Answer:
Verified
Correct Answer:
Verified
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