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Zeppelin Inc has EBIT of $72 million. The firm carries no debt currently, but it plans to raise debt of $345 million at a cost
Zeppelin Inc has EBIT of $72 million. The firm carries no debt currently, but it plans to raise debt of $345 million at a cost of debt of 5.7% and keep this debt forever. The corporate tax rate is 21%. What is the present value of the interest tax shield from this increase in debt? (answer in dollar millions, but without the dollar sign, e.g. "12.23" is $12.23 million)
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