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Problem 18-22 Question Help Markum Enterprises is considering permanently adding an additional $194 million of debt to its capital structure. Markum's corporate tax rate is
Problem 18-22 Question Help Markum Enterprises is considering permanently adding an additional $194 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
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