The tax shelter from debt is less valuable as the lower the tax rate. Consider the WACC's debt service costs: rd (1-Tax rate). The cost of debt is not reduced as much when the Tax rate is low as it is when the Tax rate is high. hence, the given statement is False.
<h3>What is the tax rate?</h3>
The tax rate in a tax system is the proportion at which a company or individual is taxed. Statutory, average, marginal, and effective tax rates are just a few of the ways that can be displayed.
Hence, The cost of debt is not reduced as much when the Tax rate is low as it is when the Tax rate is high. hence, the given statement is False.
Learn more about tax rate:
brainly.com/question/509359
#SPJ4
