The depreciation tax shield is best defined as the:

The Debt used in the purchase creates Interest Expense that reduces the acquired Company’s Tax bill. As you can see from the above calculation, the Depreciation Tax Savings as the expense increases. Interview questions around the Depreciation Tax Shield are quite common because it ties directly into the Discounted Cash Flow (DCF) analysis process. Depreciation […]

The depreciation tax shield is best defined as the: Read More »