Butter & Jelly reduced its taxes last year by $350 by increasing its interest expense by $1,000. Which of the following terms is used to describe this tax savings?

Butter & Jelly reduced its taxes last year by $350 by increasing its interest expense by $1,000. Which of the following terms is used to describe this tax savings?    A.  interest tax shield B.  interest credit C.  financing shield D.  current tax yield E.  tax-loss interest Refer to section 16.4

7.	The unlevered cost of capital refers to the cost of capital for a(n):    A.  private entity. B.  all-equity firm. C.  governmental entity. D.  private individual. E.  corporate shareholder. Refer to section 16.4

8.	The explicit costs, such as legal and administrative expenses, associated with corporate default are classified as _____ costs.    A.  flotation B.  issue C.  direct bankruptcy D.  indirect bankruptcy E.  unlevered Refer to section 16.5

9.	The costs incurred by a business in an effort to avoid bankruptcy are classified as _____ costs.    A.  flotation B.  direct bankruptcy C.  indirect bankruptcy D.  financial solvency E.  capital structure Refer to section 16.5

10.

By definition, which of the following costs are included in the term "financial distress costs"? I. direct bankruptcy costs II. indirect bankruptcy costs III. direct costs related to being financially distressed, but not bankrupt IV. indirect costs related to being financially distressed, but not bankrupt    A.  I only B.  III only C.  I and II only D.  III and IV only E.  I, II, III, and IV Refer to section 16.5