Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

please answer ASAp Assume that Microsoft has a total market value of $298.4 billion and a marginal tax rate of 35%. If it permanently changes

please answer ASAp

Assume that Microsoft has a total market value of

$298.4

billion and a marginal tax rate of

35%.

If it permanently changes its leverage from no debt by taking on new debt in the amount of

13.4%

of its current market value, what is the present value of the tax shield it will create?

The present value of the tax shield is

$nothing

billion. (Round to two decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals of Cost Accounting

Authors: William Lanen, Shannon Anderson, Michael Maher

3rd Edition

978-0077398194

Students also viewed these Finance questions