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What is the present value of the interest tax shields

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Reference no: EM132993125

Problem 1: Your firm currently has $112 million in debt outstanding with a 6% 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 21%?, 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: EM132993125

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