Safeco Inc. has no debt and maintains a policy of holding $11 million in excess cash reserves,
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Safeco Inc. has no debt and maintains a policy of holding $11 million in excess cash reserves, invested in risk-free Treasury securities. If Safeco pays a corporate tax rate of 35%, what is the cost of permanently maintaining this $11 million reserve? What is the present value of the additional taxes that Safeco will pay?
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Related Book For
Corporate Finance The Core
ISBN: 9781292158334
4th Global Edition
Authors: Jonathan Berk, Peter DeMarzo
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