Your firm currently has $100 million in debt outstanding with a 10% interest rate. The terms of the loan require the firm to repay $25 million of the balance each year. Suppose that the marginal corporate tax rate is 40%, and that the interest tax shields have the same risk as the loan. What is the present value of the interest tax shields from this debt?

The present value of the interest tax shields is

$______________ million

Facebook, Inc. had no debt on its balance sheet in 2014, but paid $22 billion in taxes. Suppose Facebook were to issue sufficient debt to reduce its taxes by $250 million per year permanently. Assume Facebook's marginal corporate tax rate is 35% and its borrowing cost is 5%.

If Facebook's investors do not pay personal taxes (because they hold their Facebook stock in tax-free retirement accounts), the value of the tax shield is $__________ Billion

If Facebook's investors pay a 20% tax rate on income from equity and a 39.6% tax rate on interest income, the value of the tax shield is $____________ Billion