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DBF borrows $5.47B by issuing 20-year bonds. ECB's cost of debt is 7.96%, so it will need to pay interest each year for the next
DBF borrows $5.47B by issuing 20-year bonds. ECB's cost of debt is 7.96%, so it will need to pay interest each year for the next 20 years, and then repay the principal $5.47B in year 20. ECB's marginal tax rate will remain 42.89% throughout this period. By how much does the interest tax shield increase the value of DBF?
NOTE: Provide your answers in Millions. E.G. for 100M you must enter 100.0000, for 20M you must enter 20.000, etc.
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