Which of the following statements is false?
A) The equivalent after-tax interest rate is r - (τ × r).
B) Interest rates vary based on the identity of the borrower.
C) The ability to deduct the interest expense increases the effective after-tax interest rate paid on the loan.
D) For loans to borrowers other than the U.S. Treasury, the stated interest rate is the maximum amount that investors will receive.

Question

Quizplus · Accepted Answer

The ability to deduct the interest expense decreases the effective after-tax interest rate paid on the loan, not increases it.

Which of the Following Statements Is False