Question
Wilde Software Development has a 14% unlevered cost of equity. Wilde forecasts the following interest expenses, which are expected to grow at a constant 3%
Wilde Software Development has a 14% unlevered cost of equity. Wilde forecasts the following interest expenses, which are expected to grow at a constant 3% rate after Year 3. Wilde's tax rate is 25%.
| Year 1 | Year 2 | Year 3 | |
| Interest expenses | $70 | $90 | $105 |
What is the horizon value of the interest tax shield? Do not round intermediate calculations. Round your answer to the nearest cent.
$
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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Finance Budget And Management For Reference Services Routledge Library Editions Library And Information Science
Authors: Ruth A. Fraley, Bill Katz
1st Edition
0367374293, 978-0367374297
