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Tax Shield Value eBook Problem Walk-Through Wilde Software Development has a 13% unlevered cost of equity. Wilde forecasts the following interest expenses, which are
Tax Shield Value eBook Problem Walk-Through Wilde Software Development has a 13% unlevered cost of equity. Wilde forecasts the following interest expenses, which are expected to grow at a constant 2% rate after Year 3. Wilde's tax rate is 25%. Interest expenses Year 1 Year 2 Year 3 $70 $90 $105 a. What is the horizon value of the interest tax shield? Do not round intermediate calculations. Round your answer to the nearest cent. $ b. What is the total value of the interest tax shield at Year 0? Do not round intermediate calculations. Round your answer to the nearest cent. $
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