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True/False: 1) Theinterestpaidbyafirmistax-deductibleandisreferredtoasinteresttaxshield. Thisistheadditionalamountthatafirmwouldhavepaidintaxesifitdidnothaveanydebtinitscapitalstructure. 2)In a world with taxes, interest tax shield tends to reduce a firms weighted average cost of capital.
True/False:
1) Theinterestpaidbyafirmistax-deductibleandisreferredtoasinteresttaxshield.
-
Thisistheadditionalamountthatafirmwouldhavepaidintaxesifitdidnothaveanydebtinitscapitalstructure.
2)In a world with taxes, interest tax shield tends to reduce a firms weighted average cost of capital.
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Financial Management Concepts and Applications
Authors: Stephen Foerster
1st edition
013293664X, 978-0132936644
