Which one of the following represents the present value of the interest tax shield? A)D / T_c B)D ´(1 - T_c) C)D/(1 - T_c) D)D - D(T_c) E)T_C ´D

Name: Which one of the following represents the present value of the interest tax shield? A)D / T c B)D ´(1 - T c ) C)D/(1 - T c ) D)D - D(T c ) E)T C ´D
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Question

Quizplus · Accepted Answer

The present value of the interest tax shield is calculated as the tax rate (T_c) multiplied by the amount of debt (D), which is represented by choice E.

Which One of the Following Represents the Present Value of the Interest