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Assume that Mircosoft pays in perpetuity $160 million per year in interest payments, its cost of debt is 8% and its marginal tax rate is
Assume that Mircosoft 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 PV of its tax shield?
a. $2,000 million
b. $1,500 million
c. $500 million
d. $2,500 million
e. $1,000 million
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