3. Tax Shields. What is an interest tax shield? How does it increase the size of the...
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3. Tax Shields. What is an interest tax shield? How does it increase the size of the "pie" for after- tax income stockholders? Explain. (Hint: Construct a simple numerical example showing how financial leverage affects the total cash flow available to debt and equity investors. Be sure to hold pretax operating income constant.) (LO2)
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Fundamentals Of Corporate Finance
ISBN: 9780073382302
6th Edition
Authors: Richard A Brealey, Stewart C Myers, Alan J Marcus
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