Arnell Industries has $$60$ million in permanent debt outstanding. The

firm will pay interest only on this debt. Arnell's marginal tax rate is

expected to be $21\%$ for the foreseeable future.

a$.$ Suppose Arnell pays interest of $6\%$ per year on its debt. What is its

annual interest tax shield?

b$.$ What is the present value of the interest tax shield, assuming its risk

is the same as the loan?

c$.$ Suppose instead the interest rate on the debt were $5\%.$ What is the

present value of the interest tax shield in this case?