Which of the following statements is FALSE?
A)The equivalent after-tax interest rate is r - (τ × r).
B)Interest rates vary based on the identity of the borrower.
C)The ability to deduct the interest expense increases the effective after-tax interest rate paid on the loan.
D)For loans to borrowers other than the U.S.Treasury,the stated interest rate is the maximum amount that investors will receive.

Question

Quizplus · Accepted Answer

The ability to deduct the interest expense actually decreases the effective after-tax interest rate paid on the loan, not increases it.

Which of the Following Statements Is FALSE