Assume That Five Years Have Passed Since Wyatt Issued This

question 84

Multiple Choice

Assume that five years have passed since Wyatt issued this debt.While tax rates have remained at 40%,interest rates have dropped so that Wyatt's current cost of debt capital is now only 4%.Wyatt's annual interest tax shield is now closest to:

• A)$2.8 million
• B)$4.2 million
• C)$40.0 million
• D)$60.0 million

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Definitions:

Directs Behavior

Refers to any factor or mechanism that guides or influences actions and responses in organisms.

Fear and Affiliation

A psychological theory suggesting that people seek the company of others when they are afraid.

Innate Predisposition

A natural tendency or inclination present at birth, influencing behaviors, preferences, or responses.

Instinct Theory

The belief that behaviors are motivated by instincts, which are innate patterns of response to specific stimuli.