Which of the following statements is FALSE?
A. The tax deductibility of interest lowers the effective cost of debt financing for the firm.
B. When a firm uses debt financing, the cost of the interest it must pay is offset to some extent by the tax savings from the interest tax shield.
C. With tax-deductible interest, the effective after-tax borrowing rate is r (τC).
D. The WACC represents the cost of capital for the free cash flow generated by the firm's assets.
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