Calculate the value of the interest tax shield

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Reference no: EM13793588

Questions:

What is a constant interest coverage policy and how does it impact the levered value of a project?

Why should issuance costs and mispricing costs be included in the assessment of the project's value? How do you include them?

Why is it important to calculate the value of the interest tax shield if a firm adjusts its debt annually to a target level?

For what reasons would a firm use a financial model in projecting future cash flows from an investment, and what are the primary factors to consider when making the cash flow estimates?

Essays:

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In what situations should the WACC and the APV be used? How do personal taxes affect the use of these two methods? Use examples when explaining your answer.

Explain the use of IRR and cash multiples as alternative valuation metrics, and discuss the drawbacks of those methods. In your answer, include how sensitivity analysis affects the evaluation process.

Reference no: EM13793588

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