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: | Faculties

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Praveen Singh

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📊 Financial Management

Q. 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).

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✅ Correct Answer: (C) D×t

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