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The Bank, ABC has three types of financial debt issues. The bank has a marginal tax rate of Tc = 21%. Compute the present value
The Bank, ABC has three types of financial debt issues. The bank has a marginal tax rate of Tc = 21%. Compute the present value of interest tax shields generated by the following types of debt: a) A 10,000 euros perpetuity debt at 6%. b) A 10,000 euros one-year debt at 3%. c) A 10,000 euros 10-year debt at 5%. d) The Banks interest rate increase with debts maturity. Do you agree with this situation?
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