To determine the benefit of leverage for the value of the firm,we must compute the ________ value of the stream of future interest tax shields the firm will receive.

Question

Quizplus · Accepted Answer

To determine the benefit of leverage for the value of the firm, we need to compute the present value of the stream of future interest tax shields. The present value takes into account the time value of money and allows us to determine the worth of future cash flows in today's dollars. Therefore, option A) present is the best choice. B) Future, C) Current, and D) Book are not relevant or appropriate measures for determining the benefit of leverage for the value of the firm.

To Determine the Benefit of Leverage for the Value of the Firm,we