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BullsEye Corp. has $15 million of debt outstanding with an interest rate of 8% and a marginal tax rate of 20%. A new tax law
BullsEye Corp. has $15 million of debt outstanding with an interest rate of 8% and a marginal tax rate of 20%. A new tax law lowers the corporate tax rate to 15%, effective immediately. What is the change in the present value of the tax shield on the debt of BullsEye if it has no maturity?
Decrease by 750,000
Increase by 180,000
Decrease by 60,000
Increase by 2,250,000
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