I feel like there could be more than one answer here. Would really appreciate any help or
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Question:
I feel like there could be more than one answer here. Would really appreciate any help or insight so I can understand it. Thx!
To determine the actual cost of using debt, a firm must adjust its bonds' average yield to maturity for the fact that _____.
interest payments on debt represent taxable income to the firm
interest payments on debt represent a tax deductible expense to the firm
the average yield to maturity on its debt is a positive return that the firm receives (earns)
the average yield to maturity on the firm's debt determines the tax rate that it pays on its operating income
the firm's bondholders do not have to pay taxes on the interest they receive from the firm
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