The tax deductibility of interest expense $\_\_\_\_\_\_\_\_.$

Group of answer choices

can sometimes increase the effective borrowing rate on an after$-$tax basis

has no effect on a firm$$s borrowing rate since tax treatment of interest expense is the same as that of dividends

all responses are correct since the tax treatment of interest expense depends on the firm$$s situation and local state tax laws

reduces the effective borrowing rate on an after$-$tax basis