Consider the Following Formula: R_wacc = R_E

question 22

Multiple Choice

Consider the following formula: r_wacc = r_E + r_D - r_Dτ_c
The term r_Dτ_c represents:

• A) the reduction due to the interest tax shield.
• B) the present value of the interest tax shield.
• C) the preset value of the future interest payments.
• D) the interest tax shield each year.

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Definitions:

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