Markum Enterprises is considering permanently adding an additional

$187

million of debt to its capital structure. Markum's corporate tax rate is

21%.

a. Absent personal taxes, what is the value of the interest tax shield from the new debt?

b. If investors pay a tax rate of

37%

on interest income, and a tax rate of

20%

on income from dividends and capital gains, what is the value of the interest tax shield from the new debt?

a. Absent personal taxes, what is the value of the interest tax shield from the new debt?

In the absence of personal taxes, the value of interest tax shield from new debt should be

$39.2739.27

million.

(Round to two decimal places.)b. If investors pay a tax rate of

37%

on interest income, and a tax rate of

20%

on income from dividends and capital gains, what is the value of the interest tax shield from the new debt?If investors pay a tax rate of

37%

on interest income, and a tax rate of

20%

on income from dividends and capital gains, the value of the interest tax shield from new debt should be

$nothing

million. (Round to two decimal places.)