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Your firm currently has $60 million in debt outstanding with a 9% interest rate. The terms of the loan require it to repay $15 million
Your firm currently has $60 million in debt outstanding with a 9% interest rate. The terms of the loan require it to repay $15 million of the balance each year. Suppose the marginal corporate tax rate is 22%, 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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