Compute the PV of the interest tax shields generated by the following three debt issues. In each case the debt is risk free while the corporate tax rate is 35%.

a) A $1,000 one-year loan at the risk-free rate of 8%.

b) A five-year loan of $1,000 at the risk-free rate of 8%. Assume interest is paid annually while the principal is paid back at maturity.

c) A $1,000 debt perpetuity at the risk-free rate of 7%.