Compute the present value of interest tax shields generated by these three debt issues. Consider corporate taxes only. The marginal tax rate is Tc = .40.
a. A $2,400, one-year loan at 7%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Present value $
b. A three-year loan of $2,400 at 7%. Assume no
principal is repaid until maturity. (Do not round
intermediate calculations. Round your answer to 2 decimal
places.)
Present value $
c. A $2,400 perpetuity at 6%.
Present value $
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