5-10 C.S. Corporate Taxes Financial Risk -Risk to shareholders resulting from the use of debt Financial Leverage- Increase in the variability of shareholder returns that comes from the use of debt Interest Tax Shield- Tax savings resulting from deductibility of interest payments Irwin/McGraw-Hill CThe McGraw-Hill Commpanies, Inc, 2001©The McGraw-Hill Companies, Inc.,2001 15- 10 Irwin/McGraw-Hill Financial Risk - Risk to shareholders resulting from the use of debt. Financial Leverage - Increase in the variability of shareholder returns that comes from the use of debt. Interest Tax Shield- Tax savings resulting from deductibility of interest payments. C.S. & Corporate Taxes