The Interest Tax Shield Has No Value for a Firm

question 57

Multiple Choice

The interest tax shield has no value for a firm when the I.tax rate is equal to zero.
II) debt-equity ratio is exactly equal to 1.
III) firm is unlevered.
IV) firm elects an all-equity capital structure.

• A)I and III only
• B)II and IV only
• C)I,III,and IV only
• D)II,III,and IV only
• E)I,II,and IV only

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Definitions:

Untoward Effects

Unexpected, adverse, or harmful effects resulting from a medical treatment or procedure.

Risk Management

The process of identifying, assessing, and mitigating risks to minimize their impact on an organization, particularly relevant in healthcare to improve patient safety.

Urinary Catheter

A tube inserted into the bladder to provide a continuous flow of urine when a patient is unable to urinate naturally.

Intravenous Line

A medical tubing inserted into a vein to deliver fluids, medications, or nutrients directly into the bloodstream.