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You are given the following information about a company: i) The company has 5000 in earnings before interest and taxes. ii) The company has 12,000

You are given the following information about a company:

i) The company has 5000 in earnings before interest and taxes.

ii) The company has 12,000 in debt.

iii) The debt cost of capital is rD = 4%.

iv) The companys tax rate is c = 30%.

Calculate the value of the tax shield.

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