In a world with taxes, the interest tax shield tends to reduce a firm's weighted average cost of capital.

Name: In a world with taxes, the interest tax shield tends to reduce a firm's weighted average cost of capital.
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The interest tax shield refers to the tax savings a company receives from deductible interest payments on their debt. This reduces the overall tax burden of the company and therefore lowers the cost of capital.

In a World with Taxes, the Interest Tax Shield Tends