Which of the Following Statements Is False

question 27

Multiple Choice

Which of the following statements is false?

• A) The tax deductibility of interest lowers the effective cost of debt financing for the firm.
• B) When a firm uses debt financing, the cost of the interest it must pay is offset to some extent by the tax savings from the interest tax shield.
• C) With tax-deductible interest, the effective after-tax borrowing rate is r(τ_C).
• D) The WACC represents the cost of capital for the free cash flow generated by the firm's assets.

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Definitions:

Compare

To examine the similarities and/or differences between two or more entities or ideas.

Self-esteem

Self-esteem is the subjective evaluation of one's own worth, including beliefs about oneself as well as an emotional response to such evaluations.

Recognize

To acknowledge or take notice of someone or something as being valid, important, or as described.

Negative Self-talk

The practice of addressing oneself with critical or pessimistic expressions, often leading to decreased motivation and self-esteem.