Debt Has Benefits for Firms Because Interest Is Tax Deductible

question 74

True/False

Debt has benefits for firms because interest is tax deductible.As long as a firm has positive earnings it can receive the full benefit of the tax deductibility of debt interest expense.

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Definitions:

Stimulus Generalization

A process in which a response to a specific stimulus becomes associated to other stimuli that are similar, leading to a similar response.

Spontaneous Recovery

The reappearance of a conditioned response after a pause or period of apparent extinction.

Principle of Spontaneous Recovery

The reappearance of a previously extinguished response after a period of no exposure to the conditioned stimulus, often observed in classical conditioning.

Fear of Rat

An irrational and intense fear of rats, technically known as musophobia.