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Problem 22-03 (Tax Shield Value) eBook Problem Walk-Through Question 3 of S Check My Work (3 remaining) Tax Shield Value Wilde Software Development has
Problem 22-03 (Tax Shield Value) eBook Problem Walk-Through Question 3 of S Check My Work (3 remaining) Tax Shield Value Wilde Software Development has a 10% unlevered cost of equity. Wilde forecasts the following interest expenses, which are expected to grow at a constant 3% rate after Year 3. Wilde's tax rate is 25%. Year 1 Year 2 Year 3 Interest expenses $75 $110 $125 a. What is the horizon value of the interest tax shield? Do not round intermediate calculations. Round your answer to the nearest cent. $ b. What is the total value of the interest tax shield at Year 0? Do not round intermediate calculations. Round your answer to the nearest cent. $
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