When taxes are factored in, debt ﬁnancing creates positive value in the form of an interest tax
shield.

Name: When taxes are factored in, debt ﬁnancing creates positive value in the form of an interest tax shield.
Brand: Quizplus
Rating: 4.9 (31 reviews)

Question

Quizplus · Accepted Answer

Debt financing allows companies to deduct interest payments from their taxable income, reducing the amount of taxes they owe. This interest tax shield creates a positive value for the company by lowering their overall tax burden.

When Taxes Are Factored In, Debt ﬁNancing Creates Positive Value