Chapter 15 Assignment 6 Problem 16-16 Tax Shields (LO2) River Cruises is all equity-financed with 60,000 shares. It now proposes to issue $350,000 of debt at an interest rate of 10% and to use the proceeds to repurchase 35,000 shares Suppose that the corporate tax rate is 21% Calculate the dollar increase in the combined after-tax income of its debt-holders and equity-holders if profits before interest are: (Do not round intermediate calculations.) Increase in Cash Flow cBook 8. $ b. $ 35 000 110,000 185.000 Print 5 References 6 Problem 16-16 Tax Shields (LO2) ts River Cruises is all-equity-financed with 60,000 shares. It now proposes to issue $350,000 of debt at an interest rate of 10% and to use the proceeds to repurchase 35,000 shares. Suppose that the corporate tax rate is 21%. Calculate the dollar increase in the combined after-tax income of its debt-holders and equity-holders if profits before interest are: (Do not round intermediate calculations.) Skipped Increase in Cash Flow a. S 85.000 eBook b. $ 110.000 185.000 C. $ Print ferences &