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Which one of the following statements is false? Interest tax shield adds value to firms The total value of the levered firms exceed the value
Which one of the following statements is false?
- Interest tax shield adds value to firms
- The total value of the levered firms exceed the value of the firm without leverage due to the present value of the tax savings from debt.
- For a levered firm, we can compute the value of its operating assets by discounting its future unlevered free cash flows using the after-tax cost of capital (WACC).
- None of the above
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