Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 1 4 pts Walmart paid out $252 million as debt interest. How much more tax would Walmart have paid if the firm had been
Question 1 4 pts Walmart paid out $252 million as debt interest. How much more tax would Walmart have paid if the firm had been entirely equity financed? What would be the present value of Walmart's interest tax shield if the company planned to keep its borrowing permanently at this level? Assume an interest rate of 11% and a corporate tax rate of 35%. $88.2 million more tax; $801.8 million present value tax shield $801.8 million more tax: $88.2 million present value tax shield O $720 million more tax: $79.2 million present value tax shield $79.2 million more tax: $720 million present value tax shield
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started