Are the tax obligations from debt a risky asset

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Reference no: EM131241354

1. For a firm without default, are the tax savings from debt a risky asset?

2. For a firm without default, are the tax obligations from debt a risky asset?

3. If you wanted to be more exact about the appropriate discount rate for the tax shelter in APV, what kind of discount rate would you apply to a firm with a decreasing debt target? What would you apply to a firm with an increasing debt target?

Reference no: EM131241354

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