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Define Each of the Symbols and Explain the Meaning of M

question 164

Essay

Define each of the symbols and explain the meaning of M x V = P x Y.


Definitions:

Interest Tax Shield

The reduction in income taxes that results from taking a deductible charge, such as interest on debt, reducing taxable income.

Tax

Compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Capital Structure

The mix of different forms of external funds and equity used by a firm to finance its overall operations and growth.

Debt-Equity Ratio

This metric calculates the relative use of debt and shareholders' equity in financing assets for a company.

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