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Remor Inc. has a constant debt - to - equity ratio policy. Company earnings are taxed. The unlevered value of the company is $ 5

Remor Inc. has a constant debt

-

-

equity ratio policy. Company earnings are taxed. The unlevered value of the company is $

5, 000, 000 .

Nevertheless, the company has debt in its capital structure. The levered wacc is

13 %

and the company has an expected unlevered, after

-

tax, perpetual cash flow of $

700, 000 .

What is the value of the interest tax shield for the company?

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