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28 Sep 2019
Compute the present value of interest tax shields generated by these three debt issues. Consider corporate taxes only. The marginal tax rate is Tc = 0.40.
a.
A $2,400, one-year loan at 7%.(Do not round intermediate calculations. Round your answer to 2 decimal places.)
PV (tax shield)____________$
b.
A three-year loan of $2,400 at 7%. Assume no principal is repaid until maturity. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
PV (tax shield)____________$
c.
A $2,400 perpetuity at 6%.
PV (tax shield)____________$
Compute the present value of interest tax shields generated by these three debt issues. Consider corporate taxes only. The marginal tax rate is Tc = 0.40. |
a. | A $2,400, one-year loan at 7%.(Do not round intermediate calculations. Round your answer to 2 decimal places.) PV (tax shield)____________$ |
b. | A three-year loan of $2,400 at 7%. Assume no principal is repaid until maturity. (Do not round intermediate calculations. Round your answer to 2 decimal places.) PV (tax shield)____________$ |
c. | A $2,400 perpetuity at 6%. PV (tax shield)____________$ |
Nestor RutherfordLv2
28 Sep 2019