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Compute the present value of interest tax shields generated by these three debt issues. Consider corporate taxes only. Assume that the marginal tax rate is
Compute the present value of interest tax shields generated by these three debt issues. Consider corporate taxes only. Assume that the marginal tax rate is Tc = 0.40. a. A $1,600, one-year loan at 8%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. A six-year loan of $1,600 at 8%. Assume no principal is repaid until maturity. (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. A $1,600 perpetuity at 7%
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