QUESTION 2 Consider the following formula: D E wacc = E+D rE + D E +D D- E+D DTC The term D E + D Dic represents the preset value of the future interest payments. o the interest tax shield each year. the present value of the interest tax shield. the reduction due to the interest tax shield. QUE IUNO Which of the following statements is false? Equity investors must pay taxes on dividends but not capital gains. The value of a firm is equal to the amount of money the firm can raise by issuing securities. By reducing a firm's corporate tax liability, debt allows the firm to pay more of its cash flows to investo For individuals, interest payments received from debt are taxed as income. QUESTION 10