Although the Value of an Additional Interest Tax Shield May

question 63

Multiple Choice

Although the value of an additional interest tax shield may be positive,firms may restrict borrowing if:

• A) the returns on the project are too high.
• B) their asset base is largely intangible.
• C) their asset beta is zero.
• D) the borrowing increases their WACC.

---

Definitions:

Parental Moral Standards

The ethical beliefs and values that parents aim to instill in their children, often reflecting the parents' notions of right and wrong.

Anxiety

A mental health disorder characterized by feelings of worry, anxiety, or fear that are strong enough to interfere with one's daily activities.

Affection

A feeling of fondness or liking, often expressed through physical or emotional closeness.

Carol Gilligan

An American feminist, ethicist, and psychologist best known for her work on ethical community and ethical relationships, and certain subject-object problems in ethics.