The Interest Tax Shield Has No Value When a Firm

question 38

Multiple Choice

The interest tax shield has no value when a firm has a:
I.tax rate of zero.
II.debt-equity ratio of 1.
III.zero debt.
IV.zero leverage.

• 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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