Consider the following statements:
The interest tax shield for a firm:
I. Is the tax benefit a firm derives from paying interest
II. Will decrease as the corporate income tax rate is increased
III. Is the yield to maturity on a firm’s bonds multiplied by the market value of the bonds outstanding
Which of the statements is TRUE?
a. I only
b. II only
d. I, II and II only
e. None of the above
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