The Interest Tax Shield Is Equal to The

question 113

Multiple Choice

The interest tax shield is equal to the:

• A) difference between interest expense and income taxes.
• B) amount of interest paid in a given year.
• C) product of the interest expense and the tax rate.
• D) product of the debt principal and the interest rate on debt.

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Definitions:

Necessary Deductions

Expenses or amounts that are required to be subtracted from income, often for the purpose of calculating taxable income.

Printer Units

Devices that produce hard copy outputs from digital data.

Cartons

Packaging containers often made from cardboard or light plastic, designed to hold goods during transport and storage.

Gallons

A unit of measurement for volume primarily used in the United States, equal to 3.785 liters.