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Aldus Astronomics is financed with 90% debt. Since Aldus does not always produce positive income, it estimates that the risk of its tax shields is
Aldus Astronomics is financed with 90% debt. Since Aldus does not always produce positive income, it estimates that the risk of its tax shields is greater than the required return for debt (rd). Thus, rd is not the correct discount rate to value future interest tax shields. Given this, how does the present value of all future tax shields compare to Tc * D?
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