In the compressed adjusted present value model, the appropriate discount rate for the tax shield is the unlevered cost of equity.

Name: In the compressed adjusted present value model, the appropriate discount rate for the tax shield is the unlevered cost of equity.
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In the compressed adjusted present value model, the tax shield is discounted using the unlevered cost of equity as it represents the cost of capital that the firm would have if it had no debt.

In the Compressed Adjusted Present Value Model, the Appropriate Discount