The company cost of capital does not make an adjustment for the tax effect.
TRUE

Name: The company cost of capital does not make an adjustment for the tax effect. TRUE
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Question

Quizplus · Accepted Answer

The cost of capital is the rate at which a company must borrow money. The tax effect is the amount of money that a company saves on taxes by borrowing money. The cost of capital does not make an adjustment for the tax effect because the tax effect is already taken into account in the interest rate that the company pays on its debt.

The Company Cost of Capital Does Not Make an Adjustment