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Your firm currently has $116 million in debt outstanding with a 9% interest rate. The terms of the loan require the firm to pay $29
Your firm currently has $116 million in debt outstanding with a 9% interest rate. The terms of the loan require the firm to pay $29 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 shields from this debt?
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