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3.(7%) Company XYZ has $100 Million equity and no debt. And it is considering adjusting its capital structure through a $20 Million leveraged buyback. That

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3.(7%) Company XYZ has $100 Million equity and no debt. And it is considering adjusting its capital structure through a $20 Million leveraged buyback. That is XYZ will be borrowing permanently $20 Million at an interest rate of 10%, and using the fund to repurchase its shares outstanding. The corporate tax rate is Tc = 0.35. Please calculate the increase in firm value due to tax shield

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