Question
A company has $15 million of debt outstanding with an interest rate of 8% and a marginal tax rate of 20%. A new tax law
A company has $15 million of debt outstanding with an interest rate of 8% and a marginal tax rate of 20%. A new tax law lowers the corporate tax rate to 15%, effective immediately. What is the change in the present value of thelifetimetax shield on the debt of the company if it has no maturity?
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 6th Edition
324664559, 978-0324664553
