APA Format: Everyt. V Vital Source O the before tax wacc. the reduction due to equity financing. Question 6 Consider the following formula: wacc = +DE+ EDDD DDDTC E+D The term 'DTC represents +DD/DTC the present value of the interest ax shield. O the preset value of the future interest payments. O the interest tax shield each year. O the reduction due to the interest tax shield. Question 7 The interest tax shield is a key reason why: O the required rate of return on assets rises when debt is added to the capital structure. O the value of an unlevered firm is equal to the value of a levered firm.