Total Market Value of a Firm (V): [D = Market

question 61

Multiple Choice

Total market value of a firm (V) : [D = market value of debt; E = market value of equity]

• A) V = D + E
• B) V = D + E + tax shield effect of debt
• C) V = D + E + tax shield effect of debt-Present value of bankruptcy costs
• D) None of the given ones

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Definitions:

Per Annum

Annually or per year, often used in the context of interest rates or salaries.

Term Deposit

A type of bank deposit that has a fixed term and typically offers a higher interest rate than savings accounts.

Down Payment

An initial upfront portion of the total amount due, often associated with the purchase of expensive goods like homes or cars, which is paid at the time of the sale.

Term Deposit

A deposit at a financial institution that has a fixed term and typically offers a higher interest rate than a regular savings account.