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Your firm currently has $64 million in debt outstanding with a 7% interest rate. The terms of the loan require the firm to repay $16

Your firm currently has $64 million in debt outstanding with a 7% interest rate. The terms of

the loan require the firm to repay $16 million of the balance each year. Suppose that the marginal

corporate tax rate is 35%, 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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