For companies that are unable to make immediate use of interest deductions,borrowing is likely to have:

Question

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Companies that are unable to make immediate use of interest deductions will not see a benefit from borrowing due to the net tax disadvantage. The interest paid on the debt will not be immediately deductible and will increase the company's taxable income, resulting in a higher tax liability. Thus, borrowing in this case is likely to have a net tax disadvantage.

For Companies That Are Unable to Make Immediate Use of Interest