Problem 15-7
		Ten years have passed since Arnell issued $10 million in perpetual interest-only debt with a 6% annual coupon. Tax rates have remained the same at 35% but interest rates have dropped so Arnells current cost of debt capital is 4%.
	a.	What is Arnells annual interest tax shield?
	b.	What is the present value of the interest tax shield today?
		Interest rate	6.00%
		Tax rate	35%
		Amount of debt	$10,000,000
		Discount rate	4.00%
	a.	What is Arnells annual interest tax shield?
		Interest payment
		Annual interest tax shield
	b.	What is the present value of the interest tax shield today?
		PV(interest tax shield)
Requirements
	1.	In cell D15, by using cell references, calculate the annual interest payment (1 pt.).
	2.	In cell D16, by using cell references, calculate the annual interest tax shield (1 pt.).
	3.	In cell D20, by using cell references, calculate the present value of the annual interest tax shield (1 pt.).

11 13 15 18 19 Problem 15.7 Ten years have passed since Arnell issued S10 million in perpetual interest-only debt with a 6% annual coupon. Tax rates have remained the same at 35% but interest rates have dropped so Arnell's current cost of debt capital 4%. a. What is Arnell's annual interest tax shield? b. What is the present value of the interest tax shield today? 6.00% Interest rate Tax rate 35% Amount of debt S10,000,000 Discount rate 4.00% a. What is Arnell's annual interest tax shield? Interest payment Annual interest tax shield b. What is the present value of the interest tax shield today? PV(interest tax shield) l