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