Bay Transport Systems (BTS) currently has $60 million in debt outstanding. In addition to 10% interest, it

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Bay Transport Systems (BTS) currently has $60 million in debt outstanding. In addition to 10% interest, it plans to repay 4% of the remaining balance each year. If BTS has a marginal corporate tax rate of 35%, and if the interest tax shields have the same risk as the loan, what is the present value of the interest tax shield from the debt?

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Corporate Finance The Core

ISBN: 9781292158334

4th Global Edition

Authors: Jonathan Berk, Peter DeMarzo

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