Unused Debt Capacity Refers to Synergistic Gains Due to Tax

question 274

True/False

Unused debt capacity refers to synergistic gains due to tax benefits in an acquisition?

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Definitions:

Floating Rate

An interest rate that fluctuates over time with the market or an index.

Fixed Rate

An interest rate that remains unchanged throughout the entire term of the loan, mortgage, or bond.

Derivative Security

A financial security whose value is dependent upon or derived from one or more underlying assets.

Hedging

Reducing a firm’s exposure to price or rate fluctuations. Also immunization.