Question
Wilde Software Development has a 12% unlevered cost of equity. Wilde forecasts the flowing interest expenses, which are expected to grow at a constant 4%
Wilde Software Development has a 12% unlevered cost of equity. Wilde forecasts the flowing interest expenses, which are expected to grow at a constant 4% rate after Year 3. Wilde's tax rate is 25%
Year 1 Year 2 Year 3
Interest Expense 80 100 120
What is the horizion value of the interest tax shield?
What is the total value of the interest tax shield at year 0?
Please include the excel sheet.
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Mathematics For Business
Authors: Stanley A Salzman, Charles D Miller, Gary Clendenen
8th Edition
0321357434, 9780321357434
