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stranahan stranahan
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7 years ago
Consider the M&M world of corporate taxes. The interest expense is $10 million, the corporate tax rate is 20%, and the discount rate on the tax shield is 10%. What is the gain to leverage or the value added from issuing debt?
A) $30 million
B) $29 million
C) $19 million
D) $20 million
Textbook 
Financial Management: Core Concepts

Financial Management: Core Concepts


Edition: 2nd
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torchunicycletorchunicycle
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7 years ago
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stranahan Author
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#2
7 years ago
Thanks Smiling Face with Open Mouth and Tightly-closed Eyes
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