Question
Why do we tax-adjust the return on debt when calculating WACC? a) because debt is risk-free b) because interest is tax deductible c) because debt
Why do we tax-adjust the return on debt when calculating WACC?
|
|
|
| a) | because debt is risk-free |
|
|
|
| b) | because interest is tax deductible |
|
|
|
| c) | because "debt doesn't matter" for corporations |
|
|
|
| d) | all of the above |
|
|
|
| e) | none of the above |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Handbook Of The Economics Of Finance Volume 2A
Authors: George M. Constantinides, Milton Harris, Rene M. Stulz
1st Edition
0444535942, 978-0444535948
