Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

If a company does not have any debt it can probably lower its cost of capital by borrowing due to; A. The interest tax shield

image text in transcribed

If a company does not have any debt it can probably lower its cost of capital by borrowing due to; A. The interest tax shield created because interest costs are tax deductible B. Interest costs decrease as the company borrows more c. The company is less likely to be the subject of a corporate takeover D. The existence of debt increases cash flow E. Risk decreases

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Developments In Entrepreneurial Finance And Technology

Authors: David B. Audretsch, Maksim Belitski, Nada Rejeb, Rosa Caiazza

1st Edition

1800884338,1800884346

More Books

Students also viewed these Finance questions