What is the annual flotation cost tax shield

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Firm A borrowed a 5 year, nonamortizing loan at a cost of 5 7%.

Firm paid total flotation cost of $14,000 at the time of borrowing.

The flotation cost will be amortized over 5 year.

Corporate tax rate is 34%.

What is the annual flotation cost tax shield?

Reference no: EM132726387

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