Looking for the answer to the question below related to Financial Management?

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:


A. r×D×t
B. r×D
C. D×t
D. (D× r)/(l-t)


The Correct Answer Is:

  • C. D×t



I hope you got the answer to your question.

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