The interest tax shield generated by a project's actual equity financing is accounted for by using the after-tax cost of equity in the WACC.
FALSE

Name: The interest tax shield generated by a project's actual equity financing is accounted for by using the after-tax cost of equity in the WACC. FALSE
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Question

Quizplus · Accepted Answer

The interest tax shield is related to debt financing, not equity. The after-tax cost of debt, not equity, is used in the WACC to account for the tax shield from interest payments.

The Interest Tax Shield Generated by a Project's Actual Equity