The Risk of Cash Flow Associated with the Lease Payment

question 19

Multiple Choice

The risk of cash flow associated with the lease payment and the depreciation shield are:

• A) different for taxable firms and the depreciation shield should be discounted at a higher riskier rate.
• B) different for taxable firms and the depreciation shield should be discounted at a lower riskless rate.
• C) the same and should be discounted at the same rate.
• D) dependent on the amount of debt displaced, therefore the discount rate may vary for both.

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Definitions:

C-13 NMR

A type of nuclear magnetic resonance spectroscopy that focuses on the detection of carbon-13 isotopes to determine the structure of organic compounds.

Off Resonance Splitting

A phenomenon in NMR spectroscopy where the splitting of signal occurs away from the resonance frequency due to interactions with neighboring atoms.

H-NMR Spectra

The set of signals obtained in hydrogen-1 nuclear magnetic resonance spectroscopy, which provides information on the molecular structure, especially about the environment of hydrogen atoms in a compound.

Quintet

A term often used in NMR spectroscopy to describe a signal pattern consisting of five peaks, indicative of the surrounding nuclear environment in molecules.