Braxton Enterprises currently has debt outstanding of $35 million and an interest rate of 8%. Braxton plans

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Braxton Enterprises currently has debt outstanding of $35 million and an interest rate of 8%.

Braxton plans to reduce its debt by repaying $7 million in principal at the end of each year for the next five years. If Braxton’s marginal corporate tax rate is 25%, what is the interest tax shield from Braxton’s debt in each of the next five years?

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Corporate Finance

ISBN: 9780137845071

6th Edition

Authors: Jonathan Berk, Peter DeMarzo

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