The interest tax shield occurs because ________. a. Interest payments are a tax-deductible expense b. Interest payments
Question:
The interest tax shield occurs because ________.
a. Interest payments are a tax-deductible expense
b. Interest payments are made from after-tax income
c. Investors require a lower rate of return the higher the company’s tax rate
d. Investors require a lower rate of return the more debt the company incurs
Step by Step Answer:
a Interest payments are a taxdeductible expense The interest tax shi...View the full answer
Related Video
Interest, debt, finance, and capital markets are all important concepts in the world of economics and business. Interest is the cost of borrowing money, and it is typically expressed as a percentage of the amount borrowed. Debt is the money that is borrowed, and it has to be repaid with interest. Finance is the study of how individuals, companies, and organizations manage their money and investments. Capital markets are the places where companies and governments can raise money by selling stocks and bonds to investors. These markets play an important role in the overall economy by helping to fund investment and growth.
Students also viewed these Business questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
26. With its current leverage, Impi Corporation will have net income next year of 4.5 million. If Impis corporate tax rate is 35% and pay 8% interest on its debt, how much additional debt can Impi...
-
Last Sale Net Bid Ask Open Int Puts Last Sale Net bid Ask Vol Open Int 16Aug 155.00(1619H155-E) 6.45 0.75 6.95 7.25 9 16Aug 155.00(1619T155-E) 1.18 (0.75) 1.17 1.25 61 4505 16Aug 166.00(1619H160-E)...
-
For this final discussion board, please reflect back on your accounting courses and answer the following questions: 1. Which course in the accounting program did you find to be the most difficult? 2....
-
An urn contains six chips, numbered 1 through 6. Two are chosen at random and their numbers are added together. What is the probability that the resulting sum is equal to 5?
-
Which of the two pumping arrangements shown in Figure P3.14 is more desirable (i.e., less demanding of pump work)? You may neglect the minor loss at the elbow in arrangement (A). PB B Figure P3.14
-
A 50-ft-long aluminum gutter (Manning coefficient \(n=0.011\) ) on a section of a roof is to handle a flowrate of \(0.15 \mathrm{ft}^{3} / \mathrm{s}\) during a heavy rainstorm. The cross section of...
-
Freeport-McMoRan Copper & Gold Inc., headquartered in Phoenix, Arizona, is one of the worlds largest copper, gold, and molybdenum mining and production companies, with its principal asset in natural...
-
Provide documentation of a step by step training plan for a beta fish. What will be the primary reinforcer? How will you cue the behavior? What schedule of reminforcement will you use. What is the...
-
Write A Shell Script To Print A Number In Reverse Order. It Should Support The Following Requirements. 5. a. The script should accept the input from the command line. b. If you don't input any data,...
-
As a company increases the weight of debt in its capital structure, ________. a. Its cost of debt capital falls b. The weight of equity capital also increases c. The value of the interest tax shield...
-
King Medical Supplies has issued preferred stock that pays a yearly dividend of $4 per share. This preferred stock is trading at a price of $47 per share. What is Kings cost of preferred stock...
-
Pedestrians walk by your store front frequently, but they only come into your store about once every 10 minutes on average. Let X be the number of pedestrians who enter the store in the next hour. a....
-
Determine (a) the absolute maximum value of live load moment and shear produced in the 50 -ft girder and (b) the maximum value of moment at midspan (Figure P12.44). Hint: For part (b) use the...
-
As noted on pages 495496, situational leadership theory identifies four basic leadership styles. To be able to identify and enact the most appropriate style of leadership in any given situation, it...
-
What is a reasonable interval for facilities to be inspected? Does the type of facility matter?
-
Why was the Privacy Protection Act enacted? a. To protect government documents b. To protect public records c. To protect the press and others not covered by Fourth Amendment d. To protect private...
-
Staleness of information for obtaining search warrant will depend upon? a. Number of days between the facts and the warrant is issued. b. Arbitrary time limitation by judge c. Facts of the case d....
-
What is the largest number of electrons with the same pair of values for n and that an atom can have? (tutorial: neon atom)
-
What recommendations would you make to Big Four firms to help them (1) avoid confrontations with governmental officials in an authoritarian society and (2) deal effectively with such confrontations...
-
The balance in Sly Companys raw materials inventory account was $45,000 at the beginning of April. Raw materials purchased during the month totaled $55,000. Sly used $48,000 in direct materials and...
-
The balance in Preston Companys finished goods inventory account was $650,000 at the beginning of March. Cost of goods manufactured for the month totaled $445,000, and cost of goods sold totaled...
-
Yamamoto, Inc., had the following activity for the year ended December 31. Required: Prepare an income statement for year ended December 31. Sales revenue $3,050,000 $ 575,000 $ 330,000 Selling...
-
s Machine-hours required to support estimated production Fixed manufacturing overhead cost Variable manufacturing overhead cost per machine-hour Required: 1. Compute the plantwide predetermined...
-
How do visionary leaders navigate the complexities of organizational dynamics to cultivate a culture of innovation and adaptability ? Explain
-
Finnish Corporation manufactures custom molds for use in the extrusion industry. The company allocates manufacturing overhead based on machine hours. Selected data for costs incurred for Job 532 are...
Study smarter with the SolutionInn App