In Order to Calculate the Tax Shields Provided by Debt

question 43

Multiple Choice

In order to calculate the tax shields provided by debt, the tax rate used is the

• A)average corporate tax rate.
• B)marginal corporate tax rate.
• C)average of shareholders' equity tax rates.
• D)average of bondholders' personal tax rates.

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Definitions:

Common Fibular Nerve

A nerve in the lower leg that branches from the sciatic nerve and provides sensation and motor function to parts of the leg.

Sciatic Nerve

A major nerve extending from the lower end of the spinal cord down the back of the thigh, and dividing into the tibial and common peroneal nerves.

Common Fibular Nerve

A nerve in the leg that supplies muscles that flex the foot and toes, and provides sensation over part of the foot.

Sciatic Nerve

The longest and widest single nerve in the body, running from the lower back down through the leg.