DBF borrows $5.73B by issuing 10-year bonds. ECB's cost of debt is 3.15%, so it will need to pay interest each year for the next 10 years, and then repay the principal $5.73B in year 10. ECB's marginal tax rate will remain 36.46% throughout this period. 

By how much does the interest tax shield increase the value of DBF?

Answer rating: 100% (QA)

The interest tax shield is the tax savings that arise from the taxdeduc... View the full answer