Which of the Following Statements Is FALSE

question 9

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:

Trichomycosis

A bacterial infection affecting hair shafts, primarily in humid regions, most commonly found in armpit hair.

Alopecia

A condition characterized by hair loss from the scalp or other parts of the body; can be temporary or permanent, and vary in pattern and severity.

Erythroderma

A severe and potentially life-threatening skin condition characterized by widespread redness and scaling that covers most of the body.

Xanthoderma

A condition characterized by the yellowing of the skin due to an accumulation of lipochrome pigments.