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Until now, Mammoth-Mart has had no debt. Mammoth-Mart is considering a plan to sell bonds worth $30B and use the proceeds to repurchase 1B shares

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Until now, Mammoth-Mart has had no debt. Mammoth-Mart is considering a plan to sell bonds worth $30B and use the proceeds to repurchase 1B shares (on the open market at $30/share). Assume that the debt is sold immediately, that the bonds are a perpetuity with annual coupons at a rate of 7%, and a yield of 7%. If Mammoth-Mart maintains this new level of debt in perpetuity, then what is the present value of the resulting interest tax shields? Assume the tax rate is 26% O $8.0B O $7.8B O $8.50 $9.0B

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