Assume that Globe Enterprise has a total market value of $200 million and a marginal tax rate

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Assume that Globe Enterprise has a total market value of $200 million and a marginal tax rate of 30%. If it decides to take out a debt that is 10% of its current market value, what is the tax shield worth?

a. 60 million
b. 200,000
c. 20 million
d. 6 million

Related Book For answer-question

Fundamentals of Corporate Finance

ISBN: 978-0132148238

2nd edition

Authors: Berk, DeMarzo, Harford

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Posted Date: May 23, 2022 06:27 AM

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Assume that Globe Enterprise has a total market value of $200 million and a marginal tax rate

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Fundamentals of Corporate Finance

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