The tax savings of the firm derived from the deductibility of interest expense is called the:
A)tax shield from debt.
B)depreciable basis.
C)financing umbrella.
D)current yield.
E)tax-loss carryback.

Question

Quizplus · Accepted Answer

The term for tax savings resulting from the tax deductibility of interest expense is called the "tax shield from debt." This tax shield can help to reduce the overall tax liability of a firm by allowing them to deduct interest expenses from their taxable income, resulting in a lower net income that is subject to taxation.

The Tax Savings of the Firm Derived from the Deductibility