Your boss at Box and Freight Company asks you how much additional debt the company would have

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Your boss at Box and Freight Company asks you how much additional debt the company would have to add through a capital restructuring in order to create $9 million in present value from the resulting interest tax shields. What would you tell your boss if the debt will have no maturity and if Box and Freight is subject to a 32 percent marginal tax rate?

Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
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Fundamentals of Corporate Finance

ISBN: 978-1119371403

4th edition

Authors: Robert Parrino, David S. Kidwell, Thomas Bates

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