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A company has $10,800 in debt and $10,000 cash. The company plans to keep its level of debt constant perpetually. Marginal tax rate = 25%.
A company has $10,800 in debt and $10,000 cash. The company plans to keep its level of debt constant perpetually. Marginal tax rate = 25%. In a repurchase program, $2,000 will be returned to investors.
What is the impact on the tax shield after the repurchase program?
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