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A firm currently has $250 million in debt outstanding with an 7% interest rate. The terms of the loan require the firm to repay $50
A firm currently has $250 million in debt outstanding with an 7% interest rate. The terms of the loan require the firm to repay $50 million of the balance each year (until the debt becomes zero). Suppose that the corporate tax rate is 21% and that the interest tax shields have the same risk as the loan. What is the present value of the interest tax shields from this debt? (Hint: consider how the debt amount
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