Question
Suppose a project financed via an issue of debt requires six annual interest payments of $18 million each year. If the tax rate is 35%
Suppose a project financed via an issue of debt requires six annual interest payments of $18 million each year. If the tax rate is 35% and the cost of debt is 8%, what is the value of the interest rate tax shield?
$23.30 million
$29.12 million
$34.95 million
$58.25 million
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Basic Finance An Introduction to Financial Institutions, Investments and Management
Authors: Herbert B. Mayo
11th Edition
1285425790, 1285425795, 9781305464988 , 978-1285425795
