Question
A company issues 1000 worth of perpetual debt. The asset, equity and debt betas are zero. The risk-free rate is 7% and the corporate tax
A company issues 1000 worth of perpetual debt. The asset, equity and debt betas are zero. The risk-free rate is 7% and the corporate tax rate is 35%
What is the present value of the debt tax shield?
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Contemporary Financial Management
Authors: R. Charles Moyer, James R. Mcguigan, William J. Kretlow
9th Edition
032416470X, 9780324164701
