14. Valuing financial leases (S26.4) In Section 26-5, we stated that if the interest rate were zero,

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14. Valuing financial leases (S26.4) In Section 26-5, we stated that if the interest rate were zero, there would be no advantage in postponing tax and therefore no advantage in leasing. Value the Greymare Bus Lines lease with an interest rate of zero. Assume that Greymare does not pay tax. Can you devise any lease terms that would make both a lessee and a lessor happy? (If you can, we would like to hear from you.)

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Principles Of Corporate Finance

ISBN: 9781264080946

14th Edition

Authors: Richard Brealey, Stewart Myers, Franklin Allen, Alex Edmans

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