The fact that the after-tax cost of debt is lower than the pretax cost of debt implicitly assumes that interest expense can be ________.

Name: The fact that the after-tax cost of debt is lower than the pretax cost of debt implicitly assumes that interest expense can be ________.
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Interest expense can be deducted from taxable income, effectively reducing the amount of tax a company has to pay. This deduction lowers the after-tax cost of debt compared to the pretax cost.

The Fact That the After-Tax Cost of Debt Is Lower