22. WACC and Taxes. The after-tax cost of debt is lower when the firm's tax rate is...
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22. WACC and Taxes. "The after-tax cost of debt is lower when the firm's tax rate is higher; therefore, the WACC falls when the tax rate rises. Thus, with a lower discount rate, the firm must be worth more if its tax rate is higher." Explain why this argument is wrong. (LO5)
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Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780073382302
6th Edition
Authors: Richard A Brealey, Stewart C Myers, Alan J Marcus
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