1. Which of the below statements are false? The present value of the interest tax shield is the same regardless of whether a firm intends to borrow permanently or temporarily If the personal tax on debt is greater than the personal tax on equity, then the introduction of personal taxes the decreases the value of the interest tax shield created by debt. If the personal tax on debt and the personal tax on equity are equal, then the introduction of personal taxes is irrelevant. All of the above. None of the above.
1. Which of the below statements are false? The present value of the interest tax shield is the same regardless of whether a firm intends to borrow permanently or temporarily If the personal tax on debt is greater than the personal tax on equity, then the introduction of personal taxes the decreases the value of the interest tax shield created by debt. If the personal tax on debt and the personal tax on equity are equal, then the introduction of personal taxes is irrelevant. All of the above. None of the above.
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