Question
Compute the present value of interest tax shields generated by these three debt issues. Consider corporate taxes only. The marginal tax rate is T c
Compute the present value of interest tax shields generated by these three debt issues. Consider corporate taxes only. The marginal tax rate is Tc = .35.
a. A $2,200, one-year loan at 9%.
b. A seven-year loan of $2,200 at 9%. Assume no principal is repaid until maturity.
c. A $2,200 perpetuity at 8%.
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The Handbook Of Municipal Bonds
Authors: Frank J. Fabozzi, Sylvan G. Feldstein
1st Edition
0470108754, 9780470108758
