Solved

Which of the Following Statements Is True Regarding the Correct

Question 48

Multiple Choice

Which of the following statements is true regarding the correct discount rate to use when discounting a firm's expected tax obligations.


A) Tax obligations should be discounted separately using the risk-free rate of interest since management has no control over them.
B) Tax obligations should usually be discounted separately using the firm's weighted average cost of capital, WACC.
C) Tax obligations should be discounted using the firm's overall cost of capital, Which of the following statements is true regarding the correct discount rate to use when discounting a firm's expected tax obligations. A) Tax obligations should be discounted separately using the risk-free rate of interest since management has no control over them. B) Tax obligations should usually be discounted separately using the firm's weighted average cost of capital, WACC. C) Tax obligations should be discounted using the firm's overall cost of capital,   , since they are risky and are positively correlated with the firm's return, regardless of the Financing method used. D) Tax obligations should be discounted with the cash flows from debt obligations at the expected rate of return on debt. , since they are risky and are positively correlated with the firm's return, regardless of the
Financing method used.
D) Tax obligations should be discounted with the cash flows from debt obligations at the expected rate of return on debt.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents