3 Problem 22 03 (Tax Shield Value) eBook Problem Walk Through Tax Shield Value Wilde Software Development has an 11 unlevered cost of equity Wilde forecasts the following interest expenses, which are expected to grow at a constant 5 rate after Year 3 Wilde's tax rate is 25 Year 1 Year 2 Year 3 Interest expenses $75 $95 $140 What is the horizon value of the interest tax shield Do not round intermediate calculations Round your answer to the nearest cent $ What is the total value of the interest tax shield at Year 0 Do not round intermediate calculations Round your answer to the nearest cent

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Question: 3. Problem 22-03 (Tax Shield Value) eBook Problem Walk-Through Tax Shield Value Wilde Software Development has an 11% unlevered cost of equity. Wilde forecasts the

3. Problem 22-03 (Tax Shield Value)

eBook Problem Walk-Through

Tax Shield Value

Wilde Software Development has an 11% unlevered cost of equity. Wilde forecasts the following interest expenses, which are expected to grow at a constant 5% rate after Year 3. Wilde's tax rate is 25%.

	Year 1	Year 2	Year 3
Interest expenses	$75	$95	$140

What is the horizon value of the interest tax shield? Do not round intermediate calculations. Round your answer to the nearest cent.

$
What is the total value of the interest tax shield at Year 0? Do not round intermediate calculations. Round your answer to the nearest cent.

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