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Find what is the horizon value of the interest tax shield

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Reference no: EM132985157

Wilde Software Development has a 12% unlevered cost of equity. Wilde forecasts the following interest expenses, which are expected to grow at a constant 2% rate after Year 3. Wilde's tax rate is 25%.

Interest expenses$70 $100 $130

Question 1: What is the horizon value of the interest tax shield? Do not round intermediate calculations. Round your answer to the nearest cent.

Question 2: What is the total value of the interest tax shield at Year 0? Do not round intermediate calculations. Round your answer to the nearest cent.

Reference no: EM132985157

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