Question
BFC has a forecast EBIT of $125,000 in perpetuity. BFCs ROE is 17% and its cost of debt is 12%. BFCs tax rate is 25%.
BFC has a forecast EBIT of $125,000 in perpetuity. BFCs ROE is 17% and its cost of debt is 12%. BFCs tax rate is 25%. If BFC has $200,000 in debt, what is the value of its tax-shield?
Please show detailed calculation and explanation.
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Dividend Growth Investing Machine
Authors: Andrew P.C.
1st Edition
1521728461, 978-1521728468
