Question
Your firm currently has $84 million in debt outstanding with a 8% interest rate. The terms of the loan require the firm to repay $21
Your firm currently has $84 million in debt outstanding with a 8% interest rate. The terms of the loan require the firm to repay $21 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 tax shields from this debt?
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Cornerstones Of Financial Accounting
Authors: Bertrand Piccard, Jay Rich, Jeff Jones, Maryanne Mowen, Don Hansen, Nick Jones
1st Edition
0324657730, 9780324657739
