Present value of interest tax shields from debt

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Reference no: EM131910624

Your firm currently has $108 million in debt outstanding with a 8% interest rate. The terms of the loan require the firm to repay $27 million of the balance each year. Suppose that the marginal corporate tax rate is 30%, and that the interest tax shields have the same risk as the loan. What is the present value of the interest tax shields from this? debt?

Reference no: EM131910624

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