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The Interest tax shield is an important part of WACC estimation because Multiple Choice It increases tax benefits and reduces the required cost of equity.

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The Interest tax shield is an important part of WACC estimation because Multiple Choice It increases tax benefits and reduces the required cost of equity. It only has to be applied when there is financing from preferred stock. It is has the potential to affect all capital component costs It reflects the tax savings adjustment to the component cost of debt for paying interest

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