19- Company A has $8,613,379 in permanent debt outstanding. The firm will pay interest only on this debt. The firm’s marginal tax rate is expected to be 36% for the foreseeable future. Suppose that the firm pays interest of 5.72% per year on its debt. What is the annual interest tax shield?
a- Company A has $9,000,963 in permanent debt outstanding. The firm will pay interest only on this debt. The firm’s marginal tax rate is expected to be 53% for the foreseeable future. Suppose that the firm pays interest of 5.21% per year on its debt. What is the present value of the interest tax shield, assuming its risk is the same as the loan?
