Interest tax shield


 

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Interest tax shield

The reduction in income taxes that results from the tax-deductibility of interest payments.



Interest tax shield

Similar Matches

Simple interest

Simple interest

Interest, normally paid annually, which is earned on deposited capital only. Unlike compound interest, the annual interest is not added to the capital. For example, if the capital deposited is £1,000 and the interest rate is £80, you would receive £80 at the end of the first year and at the end of the second year. This contrasts with compound interest, where the £80 interest earned on the first year would be added to the original capital, and the amount of money earning interest in the second year would be £1,080.00.


Earnings before interest and, taxes (EBIT)

Earnings before interest and, taxes (EBIT)

A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of interest and income taxes.


Spot interest rate

Spot interest rate

Interest rate fixed today on a loan that is made today. Related: Forward interest rates.


Interest receivable

Interest receivable

An accounting term which refers to the amount of income a company receives in the form of interest payments on its cash. The figure for interest receivable can be found in the balance sheet. Its flip side is 'interest payable' - the amount a company pays on its borrowings.


Interest only mortgages

Interest only mortgages

With an interest-only mortgage, your monthly repayments to the lender consist only of interest on the total loan amount. The interest payments will vary depending on the interest rate being charged by the lender at the time. This type of mortgage involves paying the lowest possible monthly outlay to the lender, as no capital is included in the repayment. Instead of repaying the capital, regular payments are put aside in a suitable investment or savings plan. This grows cumulatively and assumptions are made regarding its growth in order to calculate a monthly repayment figure. If you are fortunate, the investment will accumulate at a higher rate than is required to pay back your loan on time, resulting in a cash surplus at the end of the term. This is not always the case however, and sometimes there can be a cash deficit at the end of the term.


Further Suggestions

Interest only loan
Interest accrual rate
Open interest
Short interest
Interim interest
Interest rate ceiling
Covered Interest Rate Parity
Market interest rate
Interest equalization tax
Mortgage interest deduction
Net interest cost (NIC)
Interest equalization tax
Interest rate
bond interest yield
stepped interest debenture stocks
Interest only strip (IO)
Applied or nominal interest rate
Variable interest rate
Daily interest
Simple interest
Effective annual interest rate
Covered interest rate
Interest expense
Covered interest parity
interest cover


 
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