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Posts: 226
2 weeks ago
Suppose a project financed via an issue of debt requires five annual interest payments of $10 million each year.  If the tax rate is 30% and the cost of debt is 6%, what is the value of the interest rate tax shield?

▸ $13.20 million

$12.21 million


▸ $11.35 million

▸ $12.64 million
Textbook 
Fundamentals of Corporate Finance
Edition: 2nd
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$12.64 million
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