What is the present value of the interest tax shield

Reference no: EM131943346

Question: Bay Transport Systems (BTS) currently has $ 45$45 million in debt outstanding. In addition to 9.0 %9.0% interest, it plans to repay 5% of the remaining balance each year. If BTS has a marginal corporate tax rate of 38%, and if the interest tax shields have the same risk as the loan, what is the present value of the interest tax shield from the debt?

Reference no: EM131943346

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