Question
Your firm currently has $116 million in debt outstanding with a 8% interest rate. The terms of the loan require the firm to repay $29
Your firm currently has $116 million in debt outstanding with a 8% interest rate. The terms of the loan require the firm to repay $29 million of the balance each year. Suppose that the marginal corporate tax rate is 21%, 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?
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Foundations of Finance The Logic and Practice of Financial Management
Authors: Arthur J. Keown, John D. Martin, J. William Petty
8th edition
132994879, 978-0132994873
