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Consider the Following Formula: Rwacc = RE

Question 39

Multiple Choice

Consider the following formula: rwacc = Consider the following formula: r<sub>wacc</sub> = r<sub>E</sub> + r<sub>D</sub> - r<sub>D</sub>τ<sub>c</sub> The terms r<sub>E</sub> + r<sub>D</sub> represent A) the after-tax WACC. B) the reduction due to equity financing. C) the before-tax WACC. D) the reduction due to the interest tax shield. rE + Consider the following formula: r<sub>wacc</sub> = r<sub>E</sub> + r<sub>D</sub> - r<sub>D</sub>τ<sub>c</sub> The terms r<sub>E</sub> + r<sub>D</sub> represent A) the after-tax WACC. B) the reduction due to equity financing. C) the before-tax WACC. D) the reduction due to the interest tax shield. rD - Consider the following formula: r<sub>wacc</sub> = r<sub>E</sub> + r<sub>D</sub> - r<sub>D</sub>τ<sub>c</sub> The terms r<sub>E</sub> + r<sub>D</sub> represent A) the after-tax WACC. B) the reduction due to equity financing. C) the before-tax WACC. D) the reduction due to the interest tax shield. rDτc
The terms Consider the following formula: r<sub>wacc</sub> = r<sub>E</sub> + r<sub>D</sub> - r<sub>D</sub>τ<sub>c</sub> The terms r<sub>E</sub> + r<sub>D</sub> represent A) the after-tax WACC. B) the reduction due to equity financing. C) the before-tax WACC. D) the reduction due to the interest tax shield. rE + Consider the following formula: r<sub>wacc</sub> = r<sub>E</sub> + r<sub>D</sub> - r<sub>D</sub>τ<sub>c</sub> The terms r<sub>E</sub> + r<sub>D</sub> represent A) the after-tax WACC. B) the reduction due to equity financing. C) the before-tax WACC. D) the reduction due to the interest tax shield. rD represent


A) the after-tax WACC.
B) the reduction due to equity financing.
C) the before-tax WACC.
D) the reduction due to the interest tax shield.

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