7 ) Whispering Pines , a recovery center for Mountain Due addicts , has a perpetual level of debt of $50 million and an equal amount of equity . Assuming the firm has no growth prospects , a B of debt of 1 25 , a B of equity of 1 25 , the expected return on the market is 12% , the risk - free rate is 3 /1 , and the corporate tax rate is 30% , what is the value ( today ) of the tax shield provided by Whispering Pines debt ? ( $1 500,000 )