A) Fleury Co. has a 38 percent tax rate. Its total interest payment for the year just ended was $24 million.

Required:

What is the interest tax shield? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).)

Interest tax shield

$

B)

Dupuis can borrow at 9 percent. Dupuis currently has no debt, and the cost of equity is 15 percent. The current value of the firm is $735,000. The corporate tax rate is 35 percent.

Required:

What will the value be if Dupuis borrows $220,000 and uses the proceeds to repurchase shares?

Value of the firm

$

C)

Neal Enterprises has no debt. Its current total value is $45 million. Assume the company sells $16 million in debt.

Requirement 1:

Ignoring taxes, what is the debt-equity ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Debt-equity ratio

Requirement 2:

Assume the company