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Consider the Following Formula

Question 32

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 term R<sub>D</sub>τ<sub>c</sub> represents: A) the reduction due to the interest tax shield. B) the present value of the interest tax shield. C) the preset value of the future interest payments. D) the interest tax shield each year.
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 term R<sub>D</sub>τ<sub>c</sub> represents: A) the reduction due to the interest tax shield. B) the present value of the interest tax shield. C) the preset value of the future interest payments. D) the interest tax shield each year.
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 term R<sub>D</sub>τ<sub>c</sub> represents: A) the reduction due to the interest tax shield. B) the present value of the interest tax shield. C) the preset value of the future interest payments. D) the interest tax shield each year.
RDτc
The term 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 term R<sub>D</sub>τ<sub>c</sub> represents: A) the reduction due to the interest tax shield. B) the present value of the interest tax shield. C) the preset value of the future interest payments. D) the interest tax shield each year.
RDτc represents:


A) the reduction due to the interest tax shield.
B) the present value of the interest tax shield.
C) the preset value of the future interest payments.
D) the interest tax shield each year.

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