What is an interest tax shield ,and how does this affect the value of company?
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What is an interest tax shield ,and how does this affect the value of company?
What is an interest tax shield ,and how does this affect the value of company?
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Answer:
[4], an interest tax shield is defined as: tax savings resulting from deductibility of interest payments. According to Damodaran [5], the interest tax shield is expressed in a similar vein: Interest is tax-deductible, and the resulting tax savings reduce the cost of borrowing to firms.
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