Question
Bayko wants to maintain its leverage at 79.8%. Bayko's cost of equity is 12% and its cost of debt is 7%. Its tax rate is
Bayko wants to maintain its leverage at 79.8%. Bayko's cost of equity is 12% and its cost of debt is 7%. Its tax rate is 25% and its market capitalization is EUR 220 million. The expected free cash flow is 10 million euros next year. What is the present value of the tax savings from interest deductibility?
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Intermediate Financial Management
Authors: Eugene F Brigham, Phillip R Daves
14th Edition
0357516664, 978-0357516669
