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Air Seattle is looking to change its capital structure from an all-equity firm to a levered firm with 35% debt and 65% equity. Air Seattle's
Air Seattle is looking to change its capital structure from an all-equity firm to a levered firm with 35% debt and 65% equity. Air Seattle's before-tax value was $5,000,000 as an all-equity firm. Determine the size of the tax shield with a corporate tax rate of 12%, 26%, 36%, and 48% if Air Seattle's capital structure is 35/65 debt to equity.
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