Question
One of the conditions that the M&M Propositions required was for there to be no tax. Which of the following is correct about introduction of
One of the conditions that the M&M Propositions required was for there to be no tax. Which of the following is correct about introduction of tax impact on company value?
a). the relaxation of the no-tax assumptions increase the value of the company by an amount equal to the future continuous compounding value of the tax shield on the companys debt obligations.
b). the relaxation of the no-tax assumptions decrease the value of the company by an amount equal to the present value of the tax shield on the companys equity obligations.
c). the relaxation of the no-tax assumptions decrease the value of the company by an amount equal to the present value of the tax shield on the companys equity obligations.
d). the relaxation of the no-tax assumptions decrease the value of the company by an amount equal to the future continuous compounding value of the tax shield on the companys debt obligations.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Port Infrastructure Finance
Authors: Hilde Meersman, Eddy Van De Voorde, Thierry Vanelslander
1st Edition
0415720060, 978-0415720069
