What is the present value of the interest tax shields

Assignment Help Financial Management

Reference no: EM131495558

Your firm currently has $112 million in debt outstanding with a 8% interest rate. The terms of the loan require the firm to repay $28 million of the balance each year. Suppose that the marginal corporate tax rate is 40%?, 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: EM131495558

Questions Cloud

What is the current exchange rate of dollars for yen : If purchasing power parity holds, what is the current exchange rate of U.S. dollars for yen?

Why should you be concerned with retirement and estate : Personal Finance: Why should you be concerned with retirement and estate?

Why is beta the theoretically correct measure of stock risk : Why is beta the theoretically correct measure of a stock’s risk? How does a bond’s current yield differ from its total return?

Determine the value of the annuity : Determine the value of the annuity now (i.e. one year before the first payment) if the valuation rate of interest is 5%.

What is the present value of the interest tax shields : Your firm currently has $112 million in debt outstanding with a 8% interest rate. What is the present value of the interest tax shields from this? debt?

Which time they will discontinue paying dividend permanently : The company announced today that it will continue to do this for another 2 years after which time they will discontinue paying dividends permanently.

Increase in interest? expense-how will free cash flow change : Grommit Engineering expects to have net income next year of $47.33 million. For the same increase in interest? expense, how will free cash flow? change?

Marketed claim against a firms cash flows : Which one of the following is a marketed claim against a firm’s cash flows?

What is the amount of? pelameds interest tax shield : What is? Pelamed's 2012 net? income? What is the amount of? Pelamed's interest tax shield in? 2012?

User Account

All Pages