The management of Graphicopy is trying to determine how much debt they should have in their capital
Fantastic news! We've Found the answer you've been seeking!
Question:
The management of Graphicopy is trying to determine how much debt they should have in their capital structure. If they sell $500,000 in perpetual bonds with a 9 percent coupon, what would be the present value of the tax shield? Assume the marginal tax rate is 35%.
a. $15,750
b. $29,250
c. $175,000
d. $45,000
Related Book For
An introduction to management science quantitative approaches to decision making
ISBN: 978-1111532222
13th edition
Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey Cam
Posted Date: