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Rainbow Holdings targets an equity weight of 1/3 and a debt weight of 2/3.Free cash flows to the firm are a perpetual $160 per year.

Rainbow Holdings targets an equity weight of 1/3 and a debt weight of 2/3.Free cash flows to the firm are a perpetual $160 per year. Cost of equity is 12%, cost of debt is 9%, and the tax rate is 33.3%. What is the present value of the interest tax shield?

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