Solution-Present value of interest tax shield on 5-year loan

Present value of interest tax shield on 5-year loan

Assignment Help Finance Basics

Reference no: EM132705759

Assume the first interest payment is to be made in one year time, no principal is paid until maturity and the marginal corporate tax rate is 35%. What is the present value of the interest tax shield on a 5-year loan of £2,000 at 5 percent interest rate? Consider only corporate taxes.

Reference no: EM132705759

Questions Cloud

How the system may be improved : Critics contend that the juvenile justice system is outdated and ineffective. Provide a researched example in how this system may be improved.

Discuss the impact on the health care delivery system : Research public health issues on the "Climate Change" or "Topics and Issues" pages of the American Public Health Association (APHA) website.

What do the spanish find noteworthy about the aztecs : What do the Spanish (Cortés and Díaz) find noteworthy about the Aztecs and their empire? How might their background and social position have influenced

What is the break-even price : A supplier lists a product at $310 and offers trade discounts of 45%, 15%, and 5% to a retailer for re-sale. What is the break-even price

Present value of interest tax shield on 5-year loan : Assume the first interest payment is to be made in one year time, no principal is paid until maturity and the marginal corporate tax rate is 35%.

Cost of equity for the firm-blueberry : If it had no debt, its cost of equity would be 16%. Its current cost of debt is 9%. What is the cost of equity for the firm if the corporate tax rate is 30%?

Discuss the effects on the social expectations and lives : Discuss the main points of both documentaries, paying keen attention to the aforementioned issues, and, its effects on the social expectations and lives

What are the pros and cons of the situation in case study : A 65-year-old woman was just been diagnosed with Stage 3 non-Hodgkin's lymphoma. She was informed of this diagnosis in her primary care physician's office.

What is the amount of gross profit earned by Abbey : Gomez Co paid the invoice within the discount period. What is the amount of gross profit earned by Abbey Co on the above transactions

User Account

All Pages

Present value of interest tax shield on 5-year loan

Reference no: EM132705759

Reference no: EM132705759

Questions Cloud

Reviews

Write a Review

Finance Basics Questions & Answers

Financial reporting and analysis

A report on financial accounting

Describe the types of financial ratios

Differences between sole proprietorship and corporation

Prepare a cash budget statement

What are the implied interest rates

State pricing theory and no-arbitrage pricing theory

Small business administration

Effect of financial leverage

Evaluate the basis for the payment to the lender

Importance of opps, ipps, mpfs and dmepos

Time value of money

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT