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What is the total value of interest tax shield at year zero

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Reference no: EM133000692

Question - Wilde Software Development has a 9% unlevered cost of equity. Wilde forecasts the following interest expenses, which are expected to grow at a constant 3% rate after Year 3. Wilde's tax rate is 25%.

Interest expenses

Year 1 - 85$

Year 2 - 100$

Year 3 - 125$

-What is the horizon value of the interest tax shield? Do not round intermediate calculations. Round your answer to the nearest cent.

-What is the total value of the interest tax shield at Year 0? Do not round intermediate calculations. Round your answer to the nearest cent.

Reference no: EM133000692

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