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Within the New England colonies, which of the following held true?
Interest Tax Shield
A reduction in taxable income for an individual or corporation achieved by deducting interest paid on their loans.
Debt-Equity Ratio
Debt-Equity Ratio measures a company's financial leverage, calculated by dividing its total liabilities by its stockholders' equity.
Capital Asset Pricing Model
A model that describes the relationship between systematic risk and expected return for assets, particularly stocks, used to assess the risk of adding a new asset to a portfolio.
M&M Proposition II
This financial theory, originating from Modigliani and Miller, states that a firm's cost of equity increases as the firm increases its level of debt financing, holding everything else constant.
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