Why Should the Debt Portion of the WACC Be Adjusted

question 90

Multiple Choice

Why should the debt portion of the WACC be adjusted for tax?

• A)Because the interest paid on debt is not taxable at the firm level
• B)Because the interest paid on debt is not taxable at the investor level
• C)Because all components of the WACC are not taxable
• D)Because the principle paid on the debt is not taxable at the firm level

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Definitions:

InputMismatchException

An exception thrown by a scanner to indicate that the next token does not match the expected pattern or type.

Catch Block

A block of code in exception handling that is executed when a specific error or exception occurs during program execution.

ArithmeticException

A type of exception in Java that occurs when an illegal arithmetic operation is performed, like division by zero.

Divisor Zero

Refers to the attempt of dividing a number by zero, which is undefined and causes an error in many programming environments.