Multiple Choice
What does the present value of the tax shield from debt formula assume?
A) The interest rate on the debt is less than cost of equity.
B) The debt will not be replaced when paid.
C) Interest on the debt is paid only when the debt matures.
D) The interest is paid semiannually.
E) The debt is perpetual.
Correct Answer:
Verified
Correct Answer:
Verified
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