In Order to Find the Present Value of the Tax

question 11

Multiple Choice

In order to find the present value of the tax shields provided by debt, the discount rate used is the:

• A) cost of capital
• B) cost of equity
• C) cost of debt
• D) none of the above

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Definitions:

Ethical Theories

are systematic and coherent frameworks used to guide moral decision-making, encompassing principles like utilitarianism, deontology, and virtue ethics.

Natural Law

A philosophy asserting that certain rights or values are inherent by virtue of human nature and can be universally understood through human reason.

External Objective

Goals or targets set by an organization that relate to interactions with elements outside of the organization, such as market share or customer satisfaction.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another. The obligated party is typically someone entrusted with the care of money or property, like a trustee or corporate officer.