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DEF has decided to borrow a permanent loan of $80 million. The interest will be compounded annually at a rate of 9.5%. The first annual

DEF has decided to borrow a permanent loan of $80 million. The interest will be compounded annually at a rate of 9.5%. The first annual interest payment will be in 1 year from today. The interest payments will go on in perpetuity. The company has a corporate tax rate of 26%. Calculate the present value of the interest tax shield.

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