The Tax Shield on Interest Is Calculated by Multiplying the Interest

question 33

True/False

The tax shield on interest is calculated by multiplying the interest rate paid on debt by the principal amount of the debt and the firm's marginal tax rate.

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Definitions:

Neutral Stimulus

An initially meaningless stimulus that, when consistently paired with an unconditioned stimulus, can acquire the capacity to elicit a conditioned response.

Conditioned Response

A learned response to a previously neutral stimulus that has been repeatedly presented alongside an unconditioned stimulus.

CR

Conditioned Response; a learned response to a previously neutral stimulus that has been repeatedly associated with an unconditioned stimulus.

UR

A term that might refer to an Unconditioned Response in psychology, which is an automatic, natural reaction to a stimulus.