CFA® Level I Corporate Finance - Static trade off theory of capital structure

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[@sunainakhedekar6802]

Super helpful!

[@ravig0331]

great vid!

[@Sisi-vp7xs]

Can someone tell me why tax shield is t*debt not t*interet😢

[@yan-u8z]

The value of the tax shield is the present value of all future interest. which is: (value of debt*tax rate*cost of debt)/cost of debt. Notice how the cost of debt cancel out in the present value formula? I think that's why.