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Assume that Microsoft pays in perpetuity $160 million per year in interest payments, its cost of debt is 8% and its marginal tax rate is

Assume that Microsoft pays in perpetuity $160 million per year in interest payments, its cost of debt is 8% and its marginal tax rate is 25%. What is the present value of its tax shields?

$500 million

$2,000 million

$2,500 million

$1,500 million

$1,000 million

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