Question
Your firm currently has$ 84 million in debt outstanding with a 10 %interest rate. The terms...
Your firm currently has$ 84 million in debt outstanding with a 10 %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 30 %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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