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

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Reference no: EM132791755

Wilde Software Development has a 12% unlevered cost of equity. Wilde forecasts the following interest expenses, which are expected to grow at a constant 2% rate after Year 3. Wilde's tax rate is 25%.

Year 1 - $75
Year 2 $100
Year 3 $135

Problem 1: What is the horizon value of the interest tax shield? Do not round intermediate calculations. Round your answer to the nearest cent $.

Problem 2: 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: EM132791755

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