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Some years ago, Honeywell issued $10 million in perpetual interest-only debt with a 5% annual coupon (at the time, the YTM was the same as

Some years ago, Honeywell issued $10 million in perpetual interest-only debt with a 5% annual coupon (at the time, the YTM was the same as the coupon rate). Currently, the corporate tax rate is 21%, and interest rates have dropped such that the cost of debt is now 3%. 


a. What is Honeywell's annual interest tax shield? 


b. What is the total present value of the interest tax shields today (i.e., their value)?

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