Silicon Ltd has $70 million of debt outstanding at an interest rate of 6 per cent and $80 million of equity (market value) outstanding. Silicon is subject to a 30 per cent corporate tax rate.

a) What is the amount of the tax shield on that debt, just for the current year? (round answer to the nearest whole number, e.g. if your answer is 4,987,654.32, type 40987654) (1 mark)

b) What is the present value of the debt tax shield if the debt will mature in 5 years? (round answer to the nearest whole number, e.g. if your answer is 4,987,654.32, type 40987654) (1 Mark)