After tax cost of debt is equal to (1-t)x

Related MCQs

• Consider the below mentioned statements: 1. A debt-equity ratio of 2:1 indicates that for every 1 unit of equity, the company can raise 2 units of debt. 2. The cost of floating a debt is greater than the cost of floating an equity issue. State True or False:
• If the weighting of equity in total capital is 1/3, that of debt is 2/3, the return on equity is 15% that of debt is 10% and the corporate tax rate is 32%, what is the Weighted Average Cost of Capital (WACC)?
• Axis Ltd is issuing 15% debentures ( face value Rs60). The net amount realized per debenture is Rs54 and they are redeemable at par after 6 years. At a corporate tax rate of 40%, what is the cost of debt?
• In case of Net Income Approach, when the debt proportion is increased, the cost of debt:
• The cost of debt capital if interest rate is 15% and tax rate is 40% is
• Debt to Total Assets of a firm is .2. The Debt to Equity boo would be:
• Debt-to-total assets (D/TA) ratio is .4. What is its debt-to-equity (D/E) ratio?
• Cost of Equity Share Capital is more than cost of debt because:
• In MM Model with taxes, where 'r' is the interest rate, ‘D’ is the total debt and 't' is tax rate, then present valued shields would be:
• An implicit cost of increasing proportion of debt is: