Question
Your firm currently has $ 80 million in debt outstanding with a 8 % interest rate. The terms of the loan require the firm to
Your firm currently has $ 80 million in debt outstanding with a 8 % interest rate. The terms of the loan require the firm to repay $ 20 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 thisdebt?
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Personal Finance
Authors: Jeff Madura, Hardeep Singh Gill
3rd Canadian Edition
978-0133035575, 133035573, 978-0133970524, 133970523, 978-0134040042
