Why is the (1 tax rate) in the WACC? How do we model the governments payment

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Why is the (1 − tax rate) in the WACC? How do we model the government’s payment of the tax rebate on interest—through a flow or in the rate?

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Entrepreneurial Finance

ISBN: 978-0538478151

4th edition

Authors: J . chris leach, Ronald w. melicher

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Question Posted: Aug 13, 2012 10:18 PM

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Why is the (1 tax rate) in the WACC? How do we model the governments payment

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The 1tax rate is included in the WACC to provide for the tax savings the firm receives d...View the full answer

Entrepreneurial Finance

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