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Which of the following statements is TRUE? Select one: A. The tax deductibility of interest lowers the effective cost of debt financing for the firm.
Which of the following statements is TRUE? Select one: A. The tax deductibility of interest lowers the effective cost of debt financing for the firm. B. To receive the full tax benefits of leverage a firm needs to use 100% debt financing. O C. The amount of money an investor will pay for a security (debt or equity) ultimately depends on the benefits the investor will receive-namely, the cash flows the investor will receive before all taxes have been paid. O D. By increasing the amount paid to debt holders through interest payments, the amount of the pre-tax cash flows that must be paid as taxes increases
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