Which of the following statements is false?
The actual cash flow that
the investor will get to keep will be reduced by the amount of any tax payments.
The right discount rate for a cash flow is the rate of return available in the market on other investments of comparable risk and term.
The equivalent after – tax interest rate is r(1-tau).
To compensate for the risk that they will receive less if the firm defaults, investors demand a lower interest rate than the rate on Treasury Bills of the Government of Canada.