Consider the Following Formula

question 85

Multiple Choice

Consider the following formula:
R_wacc =
R_E +
R_D -
R_Dτ_c
The terms
R_E +
R_D represent:

• A)the after-tax WACC.
• B)the reduction due to equity financing.
• C)the before-tax WACC.
• D)the reduction due to the interest tax shield.

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Definitions:

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