Consider the Following Formula: Rwacc = RE

question 72

Multiple Choice

Consider the following formula: rwacc = rE + rD - rDτc
The term rDτc represents:

• A)the reduction due to the interest tax shield.
• B)the present value of the interest tax shield.
• C)the present value of the future interest payments.
• D)the interest tax shield each year.

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