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  3. which of the following statements is false? the ta

Which of the following statements is FALSE? The tax deductibility of interest lowers the effective...

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Finance

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Which of the following statements is FALSE? The tax deductibility of interest lowers the effective cost of debt financing for the firm. The stream of interest payments can be discounted to the present value to determine the interest tax shield, which decreases the value of the firm. When a firm uses debt, the interest tax shield provides corporate tax savings each year, lowering the government's stake in the company. Future interest payments vary due to changes the firm makes in the amount of debt outstanding, changes in the interest rate on that debt, and the risk that the firm may default and fail to make an interest payment

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